The Origins of the UK Student Loan Overpayment Scandal

The UK student loan overpayment scandal emerged in early 2026, centering on approximately 22,000 students enrolled in weekend-only higher education courses across 15 English universities and colleges. These learners, often mature students balancing full-time jobs and family commitments, were granted maintenance loans and childcare grants totaling around £190 million for the 2025/26 academic year alone. The issue stems from a misclassification by universities, which registered these courses as 'in-attendance' full-time programs eligible for living cost support, rather than 'distance learning' modes that qualify only for tuition fee loans.

Student Loans Company (SLC), the government-backed administrator of student finance in the UK, discovered the discrepancy during a routine audit prompted by a December 2025 Department for Education (DfE) warning on attendance classifications. Weekend-only delivery was deemed ineligible for maintenance funding under longstanding rules, as it does not meet the 'full-time in-person attendance' threshold typically requiring weekday sessions. This error affected vulnerable cohorts, including working parents and first-generation university attendees from lower-income backgrounds pursuing degrees in fields like business management, health, and computing.

How the Misclassification Occurred Step-by-Step

The process unfolded as follows: Universities submit course attendance data to SLC via the Student Finance England portal. For full-time undergraduate courses under Plan 2 (for students starting after 2012), providers must specify 'in-attendance' status to unlock maintenance loans up to £10,227 annually outside London. Weekend courses, designed for flexibility, were incorrectly flagged as such, bypassing checks that distance or predominantly weekend learning—where students work weekdays—does not qualify.

• Step 1: Providers recruit students promising full maintenance support, enrolling thousands since 2022/23.
• Step 2: SLC pays out based on submitted data, disbursing £190m+ in 2025/26.
• Step 3: DfE alerts in Dec 2025; SLC audits March 2026, blocks future payments.
• Step 4: Letters sent late March/early April 2026 demanding repayment, some with mid-April deadlines amid exams.

This systemic lapse highlights governance gaps in franchise arrangements, where lead universities partner with smaller providers like the London College of Contemporary Arts.

Affected Institutions: The 15 Universities in the Spotlight

While DfE has not published a full list, reports identify key players: London Metropolitan University, Bath Spa University, Leeds Trinity University, Southampton Solent University, Oxford Brookes University, University of West London, and franchise partners such as the London College of Contemporary Arts. Others include institutions running weekend business and health programs. These mid-tier universities, often serving diverse adult learners, now face reputational damage and financial liabilities from potential withdrawals.

Northern College of Acupuncture secured an exemption due to hands-on weekday tutorials, illustrating case-by-case reviews. Lead providers risk absorbing costs under franchise agreements if partners falter.

Human Impact: Real Stories from Affected Students

Cosmin Visan, 34, and partner Elena Braisteanu, 25, at London College of Contemporary Arts (franchised), face repaying over £30,000. Weekday construction work and childcare made weekends ideal; now anxiety mounts, with dropout looming. Karolina Osuchowska at London Met risks halting health/social care studies. Khawaja Ahsan, Southampton Solent graduate, juggles job hunts with post-grad repayments up to £37,000. These cases underscore disproportionate harm to working-class families, migrants, and parents—64% part-time enrollment drop since 2010/11 exacerbates access barriers.

Students report distress: blocked payments mid-term, no income-contingent relief (unlike standard Plan 2 loans repaid above £28,470 threshold), forcing lump sums or plans.

SLC and DfE Stance: Recovery Without Blame on Students

SLC letters state: "Your university made an error... didn’t tell us you only attended on the weekend." Repayments via affordable plans, hardship deferrals if proven (e.g., via bank statements). DfE Secretary Bridget Phillipson: "Not students’ fault... incompetence or abuse by organisations." No fraud proven, but Public Sector Fraud Authority probes agents. Total overpayments £446m historic, this £190m chunk impairs DfE budgets.

Official SLC eligibility guidance clarifies rules, but critics say abrupt enforcement lacks transition.

Universities Push Back: Legal Challenges and Support Measures

Universities UK (UUK): "Abruptly blocked... working on legal advice." Some add weekday sessions for eligibility; others offer hardship funds, bridging loans, fee waivers. OfS mandates student protection plans, but franchise fragility risks insolvencies. Providers argue good-faith reliance on prior approvals.

NUS Campaign and Broader Advocacy

National Union of Students (NUS) labels it a "scandal," petition "Don't Take Weekend Students' Maintenance Loans" exceeds 12,000 signatures. President Amira Campbell: "Lifeline for mature students... massive access issue." Calls for compensation, refunds, mis-selling probes under Consumer Rights Act 2015.

Martin Lewis (MSE): "Sort between unis/gov, not penalise students."

Understanding Maintenance Loan Rules in UK Higher Education

Plan 2 Maintenance Loans (post-2012 starters): Full-time (120+ credits/year), in-attendance (not distance/weekend-only). Distance learners get tuition only; exceptions for disability. Weekend models boomed for flexibility but clashed with rules assuming weekday immersion. Part-time decline: HESA data shows 200,000+ affected historically.

Repayment Pathways and Hardship Relief

• Lump sum immediate.
• Instalment plan via SLC.
• Deduct from future tuition/maintenance.
• Hardship deferral: Prove via finances.
• Uni hardship funds/waivers.

Complaints: Uni first, then Office for the Independent Adjudicator (OiA) within 12 months. Legal via judicial review.

Implications for European Higher Education and UK Unis

In Europe, UK leads flexible learning but funding rigidities hinder. Scandal accelerates part-time collapse, workforce upskilling gaps (net-zero, health). Unis face £2bn deficits; franchise model scrutiny. Wonkhe: "Financial emergency, not fraud."Wonkhe analysis warns contagion.

Future Outlook: Reforms and Lessons

Gov hints discretion; appeals ongoing. Potential: Redefine 'attendance,' fund flexi-learning, validate data pre-payment. For Europe unis, prioritize compliance, transparent advice. Positive: Spotlights mature learner needs.

Actionable Advice for Students and Institutions

1. Contact SLC/uni immediately for reassessment.
2. Document hardship for deferral.
3. Explore transfers/weekday options.
4. Join NUS petition.
5. Seek careers support amid uncertainty.

This scandal underscores need for robust student finance in UK higher education, balancing access with accountability.

Photo by Thomas de LUZE on Unsplash