I'm sorry for funding fiasco, says student loans chief

Apology to students left short of money as company revamps application process

The chief executive of the Student Loans Company says his organisation gave students "a much bumpier ride than they should have had" last year.

Ralph Seymour-Jackson accepted that the body had "failed to provide the service it should have done".

But in his first full interview since last summer's fiasco – when more than 100,000 students were left short of funds – he told The Independent that the SLC was well placed to deal with the current crop of applicants.

"If you apply by the administrative deadline [the end of June], we will make sure you have your money at the start of term once you've registered," he said.

The company is taking on between 150 and 200 extra staff for the crucial weeks after clearing begins to process students' queries. Some will be working only for a short period during the run-up to and during the first few weeks of the university term.

It is also taking advantage of the internet, allowing students to track the progress of their applications through Twitter for the first time.

"We realise we have to let people know what's going on by contacting them using Twitter and mobile phones," Mr Seymour-Jackson said. "As one student put it: 'I use email to communicate with my parents'.

"They get their information through Twitter and mobile phones ... there is no point in writing to them at their parents' address or using their landlines."

As part of the new arrangement, prospective students will be able to log in to the micro-blogging site and communicate directly with SLC staff. The organisation's account will remind them about key dates in the application process, and the students will be able to tell the SLC when their university place has been confirmed.

Mr Seymour-Jackson said last year was "always going to be a bumpy ride" as the company took over responsibility for providing loans from more than 150 local authorities. But he added: "It was a much, much bumpier ride than it should have been."

Asked if he had ever considered resigning at the height of the crises, he said: "No. It was clear to me that we had failed in providing the sort of service that we should. It was also quite clear that some of the changes we faced might be painful."

Two of the SLC's directors – Wallace Grey, its information technology director, and Martin Herbert, director of marketing and customer services – resigned after a critical inquiry into the fiasco concluded that the company had been guilty of "conspicuous failure". The backlog has now been cleared, although organising the financial affairs of 23,000 disabled students has taken even longer to complete.

"This is not surprising," Mr Seymour-Jackson said. "In many cases an assessment of their needs could not be carried out until they had started at university."

This year the company will face even more pressure to meet the demand for student loans, after an extra 23,000 people applied for university. While all of these will not be successful in the scramble for places, they are still likely to make applications for loans which have to be processed in advance of A-level results.

"We got students their money last year," he said, "but we made the provision of it a lot harder than it should have been. This summer we're going to face a huge growth in applications but we're fully resourced to take account of the large growth in numbers.

"We started processing them in December rather than February – as we did last year. We've also been very clear to students about the deadlines they have to meet."

Figures published today show graduate recruitment slumped by 11 per cent last year, but is expected to rise by 3.7 per cent in 2010. The figures, from Income Data Services, show that the public sector is expected to slash recruitment by 6.6 per cent as a result of a squeeze on spending.