Nine universities have launched legal action against the government over the abrupt cancellation of student loans affecting around 22,000 students in England. As detailed by BBC News and MoneySavingExpert, those students have received letters demanding immediate repayment of maintenance loans and childcare grants that were initially approved by the Student Loans Company. Some of those affected are just weeks away from completing their three-year degrees.
The dispute centres on a reclassification of weekend courses as “distance learning.” Students attending classes in person only on weekends are not normally eligible for maintenance loans or childcare grants, which are reserved for those on “in-attendance” programmes. The Department for Education (DfE) says 15 universities incorrectly classified these courses, resulting in approximately £190 million in maintenance loans and childcare grants being paid out in the current academic year alone.
Three universities have publicly named themselves in the legal action: Bath Spa, Southampton Solent, and London Metropolitan. All nine describe the government’s decision as “abrupt” and taken with “minimal notice,” stating it has caused “serious financial distress” for affected students, with some now considering dropping out.
The universities say students acted in good faith and are being punished for errors they didn’t make
Professor Georgina Andrews, vice-chancellor of Bath Spa University, said the universities acted in “good faith” and that the decision has punished “those who are the most vulnerable in our society who are trying to better their lives through education.” The universities collectively reject the classification of in-person, timetabled weekend teaching as “distance learning,” calling it something that “defies common sense.” Professor Julie Hall, vice-chancellor of London Metropolitan University, added that the decision “hits students from underrepresented and lower income backgrounds the hardest.”
The government has declined to comment on the legal action directly but has not held back on where it places blame. It argues that universities either failed to follow existing regulations or that there have been “abuses” of the system. Education Secretary Bridget Phillipson wrote to higher education providers in December 2025 warning that weekend-only students were ineligible for maintenance loans.
She has stated that students are not at fault but has pressed universities to take “immediate action” to support those facing financial difficulties. Amid separate coverage of individuals facing unexpected consequences from government decisions, US soldiers quietly exiting the military over policy shifts drew its own wave of attention this week.
For affected students, the repayment terms are a sharp departure from the norm. Under the standard Plan 5 scheme for loans issued in England since 2023, graduates repay at 9% of earnings above £25,000, over a period of up to 40 years. The letters now being sent out reference “accelerated” repayment timelines, which is a significant departure from what students were originally told to expect.
The National Union of Students has been vocal in its response. NUS vice president Alex Stanley said students’ trust has been “broken,” and that Education Secretary Phillipson has the power to halt the immediate clawback of loans regardless of where the blame lies.
The NUS has gathered 13,000 petition signatures and plans to send hundreds of students to Westminster to deliver their demands directly to the DfE. NUS president Amira Campbell highlighted the particular impact on student parents, noting that maintenance loans support not only the students themselves but their families.
Martin Lewis, founder of MoneySavingExpert.com, called the situation an “almighty pig’s ear” and said it “shows once again that our student loan system is broken.” He argued that students who did everything right should not be penalised, and that universities and the government should settle the cost between themselves while allowing affected students to repay under normal procedures.
Among those affected is Karolina Osuchowska, 47, a school coordinator studying health and social care at London Metropolitan University. She commutes from West Yorkshire to Manchester for weekend classes and was given just one week in late March to decide whether to continue without a maintenance loan or switch to weekday study. She was also informed she owed £8,694 in repayments. “I know everyone says that it’s not the students’ fault, but we will have to pay for this NOW, not after we finish,” she told MoneySavingExpert, adding that the demand is a “nightmare” while she supports her teenage son through his GCSEs.
A computing student at Southampton Solent who began her course in 2023 received an email on March 26 notifying her that her course did not meet the in-attendance threshold, with two weeks to decide her next steps. “At no point during all these years were we ever told that the course we’re studying and the way we’re studying is not classified as in-attendance,” she said.
The Student Loans Company, which administers the loans, stated that the relevant regulations have been in place since 2011 and that universities are responsible for correctly classifying their courses. It added that it would work with students to establish “affordable repayment plans” and that it acted at the government’s request to prevent public funds from being paid out in respect of incorrectly designated courses.
The Office for Students, England’s higher education regulator, said it expects universities to shield students from unexpected costs, including through hardship support, and that institutions unable to reach agreement with students “should stand ready to offer appropriate redress, which could include financial compensation.” A limited group of students, including those at the Northern College of Acupuncture, will continue receiving maintenance loans given the hands-on nature of their tutorials. Separately, a wave of public frustration over institutions failing the people they are meant to serve has been building across different sectors, including the case of a 20-year-old charged following an alleged attack on a tech CEO’s home.
The government has announced plans to introduce stricter oversight rules for smaller private colleges operating under franchise agreements, requiring any college with over 300 students to come under OFS scrutiny before being eligible for student finance. The OFS is set to publish draft plans requiring regulated institutions to provide clearer information to students on complaints, refunds, compensation, and recruitment agents.
Students unable to secure support from their university are advised by the DfE to raise a formal complaint through internal channels and, if unresolved, escalate to the Office of the Independent Adjudicator for Higher Education.
Published: Apr 15, 2026 08:45 pm