Student who was facing £18,000 repayment while studying given reprieve

Students who were told they'd have to immediately pay back loans and maintenance grants totalling tens of thousands of pounds have been given a reprieve.

An estimated 22,000 students were given maintenance loans and grants they weren't eligible for - with universities, the Student Loans Company and government disagreeing over who and what is to blame.

Our Money blog team spoke to Vlad Iordan, who is doing a business management degree at London Metropolitan University. He'd been told to immediately pay back almost £18,000 in loans prior to the reversal and thought he would have to sell his house.

"I can't sleep at night. It's a struggle, you know. I'm in debt at the moment anyway, but that money helped me to be exactly on the water. Now, actually, I'm sunk," he told Money before the government announcement.

Like all the affected students, Vlad, 32, only attends weekend courses, so he is ineligible for the financial support.

Thankfully for him and the others, the government announced in the Commons last week that it had asked the Student Loans Company to collect overpayments through normal student finance repayments, once people earn over the earnings threshold. The recovery of grant overpayments was also paused until at least September.

"This will alleviate the pressure off students who are not at fault here," the government said.

Blame game

Money understands that students of at least 15 universities have been affected by the mistake - but there is disagreement about who is to blame.

The government-owned Student Loans Company (SLC) said weekend-only attendance courses were classed as distance learning and therefore not eligible for support.

The specific regulation has been in place since 2011, and all providers are required to adhere to these rules.

The issue arises when franchised providers (companies that deliver courses on behalf of universities) offer weekend-only courses and incorrectly register them as "in attendance" courses.

But London Metropolitan University and a group of eight other institutions disagree with SLC and the government, saying the problem has been caused by an "abrupt" change in guidance.

"The group are appalled that the DfE and SLC are characterising this change in policy as an error by universities when classifying their courses," London Metropolitan University said, who claim the government's announcement last week followed pressure from universities.

"Universities have followed and applied the SLC guidance on course classification for years and this recent shift in guidance from DfE and SLC has been implemented inconsistently and without meaningful engagement with the sector."

The university added its "primary focus" was supporting students affected by the change.

The universities are now pursuing legal action.

What happened to Vlad?

Even without an immediate demand for the money to be returned, the students have had further funding cancelled.

Vlad was given two options by his university - continue his current course with no further maintenance loan, or move to a weekly study pattern, which may allow him access to further maintenance support in future.

The logistics manager said: "I didn't actually realise how important the money was... but then you put it on expenses like petrol, food and time when you do the assignment, and it's quite important."

Universities and colleges have been told by the Department for Education that they must support students and provide financial hardship support.

The DfE has also "urgently requested" that the courses be recategorised correctly so students can be reassessed and work out what financial support they are eligible for.

Should they continue to be eligible for student finance, as per the correct regulations, the SLC will continue to provide the necessary payments.

If they are no longer eligible for student finance, no further payments will be made.

(c) Sky News 2026: Student who was facing £18,000 repayment while studying given reprieve