Corporate report

Independent Assessors’ Annual Report for SLC 2020 to 2021

Published 21 October 2021

1. Introduction

We are the Independent Assessors (IAs) and we are appointed by the UK and Welsh Governments to consider appeals and complaints by student finance customers. This is our annual report to those Governments for the financial year 2020-21 (the FY) and covers cases on which we have reported in the twelve months to 31 March 2021. It sets out the background to our work and the role we play, describes our caseload during the year, and draws out some themes from it. The report then refers to the role of ombudsmen in considering Student Loans Company Limited (SLC) cases and concludes with some recommendations.

2. Background

There are presently 8 IAs but there were 9 during the FY and there is a recruitment exercise currently underway.

Our appointments are statutory and are made under s23(6) of the Teaching and Higher Education Act 1998. Complaints about the older mortgage style loans, which have now been transferred to the private sector, may be referred to us if they do not fall within the remit of the Financial Ombudsman Service. Student finance customers have access to an IA if they remain dissatisfied after two formal stages of appeal or complaint within the SLC.

Our recommendations are binding on the SLC unless it is directed otherwise in the name of a Secretary of State or Welsh Minister. Responsibility for the SLC and for our appointments within the UK Government lies with the Department for Education (DfE) and the Welsh Ministers.

Each report is the responsibility of an individual IA but we operate a routine system of peer review to provide comments on emerging findings and encourage a broad consistency of approach.

In the event that officials disagree with our recommendations to the SLC, they advise Ministers accordingly. In the vast majority of cases the Director General Higher Education and Further Education (who has delegated authority) decides whether or not those recommendations should be implemented. Complex cases are passed up for Ministerial approval. In so far as Welsh cases are concerned these are passed to a Welsh Minister for a decision. We routinely explain the provisional status of our recommendations to every appellant and complainant. As at the date of the report, the SLC had received instructions not to accept the IA recommendation in 6 cases, which consisted of 5 complaints and one appeal which related to the previous year. In one of the complaint cases, whilst the DfE did not accept the IA recommendation, they did authorise an alternative which had the same outcome for the customer.

In our reports we make recommendations to address the specific circumstances of the case and also with respect to any more general issues arising from our analysis. We meet with SLC and departmental staff to review the complaints and appeals caseload and how our reports have been handled and are briefed on relevant administrative developments and policy proposals. Our remit does not extend to the policy behind the regulations and in deciding appeals we are bound to accept the provisions of the regulations as they stand. However, our reports may sometimes lead to reconsideration of the wording of the regulations or accompanying guidance, if, for example, a particular case highlights some ambiguity.

Once again, we have continued to receive excellent support throughout the year from the SLC Independent Assessors Liaison team. We wish to express our thanks for their consistent invaluable input and help, and likewise from their SLC colleagues.

3. Caseload

The SLC has separate channels for handling appeals and complaints. An appeal is a formal request for a review of a decision, as to entitlement to support or regarding the level of funding awarded. It will usually involve a contention that the regulations have not been applied correctly. A complaint is any expression of dissatisfaction with the service which the organisation has provided.

The number of IAs in post at any time will obviously affect the time it takes for appeals and complaints to be escalated and resolved. At the end of March 2020, there were 13 appeals and 39 complaints awaiting allocation to an IA with a waiting time of 3 months and 4 months respectively. One year later, at the end of March 2021, the figures were 11 appeals and 23 complaints awaiting allocation to an IA with a waiting time of 6 weeks and 3 months respectively.

The SLC, like every other organisation in the country suffered with a reduced ability to function as they once did, as a result of Covid-19. The work force was reduced, through illness and self-isolation and the SLC had to adapt to new working practices quickly. Moving teams from the office to home working and putting in place secure systems led to unavoidable delays for several weeks, because staff were simply unable to access equipment and systems. The impact of this was reflected in the time it took for complaints and appeals to be escalated to IA’s with some customers being told that there was an 8 month wait. The months at the start of the pandemic were mostly impacted and led to a backlog of cases waiting for allocation to an IA. We saw a number of complaints from customers who said that their complaint or appeal had not been registered in time or escalated within normal time limits. The IAs were conscious of the strain on the SLC in what were unprecedented times and this was reflected in our responses. Nevertheless, we pointed out in our reports that just as customers were expected to continue to pay the same level of fees for courses which had been seriously impacted over the period of the pandemic, and had seen no variation in the terms and conditions of their SLC loans, so too were they entitled therefore to expect no diminution in the standards of service they received.

4. Appeals

During the year we have reviewed 62 appeals. A comparison with the preceding four years may be seen in the following table:

Year SLC Decision Upheld Appeal Upheld Total
2020/21 60 2 62
2019/20 86 19 105
2018/19 52 25 77
2017/18 81 28 110 (1 withdrawn)
2016/17 89 19 108

The following table sets out the broad categories of appeal with comparable figures for previous years:

Subject matter 16/17 17/18 18/19 19/20 20/21
Unfitted (Fraud) 39 43 32 40 6
Previous study/ ELQ 14 9 5 11 7
Residency 26 24 14 30 26
Overpayment/Repayment 1 1 1 5 4
Funding entitlement 7 9 6 8 4
Migrant Worker 6 5 6 4 4
Postgraduate loan 6 9 4 3 1
Other 9 10 9 4 8
Total 108 110 77 105 60

There were no Welsh appeals referred to the IAs.

In considering an appeal IAs will sometimes also address service issues which have arisen in the handling of a case. During 2020-21 recommendations were made in seven cases for the offer of an ex gratia payment. The total amount recommended for payment in these cases was £1100.

There are a number of themes which have arisen in SFE appeals which we have considered this year which we would like to highlight:

a) Effect of Pandemic on Eligibility – The way in which the DfE has responded to the pandemic and the processing of applications has been extremely positive. The emphasis has been on avoiding or minimising any adverse effects that could arise as a result of delays or restrictions. We note for example, that international customers who had been unable to travel to the UK because of COVID restrictions were nevertheless found to be resident in the UK on the first day of the first year of the academic course, provided they were able to provide evidence of why they were unable to travel. Examples of such changes to policy reduced uncertainty and reflected in real time, the challenges that were affecting customers around the world, who were coming to the UK to study.

b) Inaccurate telephone advice – We have commented on this issue last year and indeed in previous years. This year we have seen a significant number of appeals and complaints from customers who have been given incorrect advice about their eligibility for funding for a second undergraduate degree course. Despite information being available for call handlers, such as the SLC’s ‘Knowledgebase’, some are nevertheless incorrectly identifying ‘exception’ courses, with a common misconception being that they are any course that falls under the banner of ‘allied health professional’. The result has been that customers applying to study courses such as Paramedic Science have relied on the advice that they are eligible for funding only to later find that they are not. In many cases, customers have incurred fees, accommodation costs and other expenses whilst in others, customers have left employment and or moved home. We have commented previously that it is not enough that recorded warnings are issued and that it is only when a formal application is made and assessed that applicants can know for sure what they will receive and that more is needed to be done. We suggested that a written communication reiterating that a customer should not rely on telephone advice and should wait for written confirmation, should be sent to a customer who has made a specific funding enquiry. We would hope that the benefits of such written communication would outweigh any potential logistical difficulties that would arise from putting this into place.

c) The ‘Exceptional Circumstances Discretion’ that exist under Regulation 19 – We have noted that in a number of appeals in which customers have been wrongly told in writing that they are eligible for funding when they are not, there has been a failure to mention or note the discretion that exists under Regulation 19 where there are ‘exceptional circumstances’. There needs to be greater transparency about what constitutes ‘exceptional circumstances’ particularly where a customer may be raising ‘hardship’. Evidence about such matters ought to be requested much earlier, because often by the time the matter comes to an IA who identifies the existence of a discretion, there is very little if any evidence of ‘exceptional circumstance’ because the customer does not know about it and has not been asked to evidence it. We appreciate that this is because the SLC have not been delegated the discretion to make decisions about ‘exceptional circumstances’, but we suggest that evidence could be requested as part of the IA process (if it is relevant) so that more information is available to us, when considering this important issue.

d) Statutory Interpretation - We have expressed some concern that IA recommendations based on a careful reading of what the student support regulations actually say have been rejected on the basis that our reading is inconsistent with the DfE’s policy intention in drafting the relevant regulation. We are unconvinced that the general principles of statutory interpretation allow a clear literal reading to be overridden in that way. In our view the better response in such a situation is to amend the regulations to align more closely with the intended policy. We are pleased to note that, in a particular area of provisions allowing the honouring of mistaken awards to customers who already have equivalent level qualifications, DfE have now undertaken to review the wording of regulations 13 and 19 to ensure that they work as intended.

5. Complaints

This year we have reported on 124 complaints, including 6 from Wales. The table below shows the comparative numbers of complaints reported on each year:

2020/21 124
2019/20 142
2018/19 168
2017/18 191
2016/17 174

Many complaints have a range of issues within them. A report in such cases will therefore review a number of issues and may contain findings adverse to the SLC on only some of the issues raised. For this reason it is difficult to describe complaints as being upheld, either in full or in part. The table below shows the complaints by categories used by SLC when the complaint is first registered:

Subject matter 16/17 17/18 18/19 19/20 20/21
Processing 74 100 80 58 35
Grant overpayment 5 5 1 n/a 2
Advice given 23 29 34 38 29
ICR 47 36 25 22 20
Other 25 21 28 24 38
Total 174 191 168 142 124

Within the 2020-21 figures, the 6 Welsh cases fell into the following categories: ‘Processing’ – 1, ‘Grant overpayment’ – 1, ‘advice given’ – 3, ‘other’ – 1.

In 2020-21 recommendations were made in 89 cases for the offer of an ex gratia payment. The total amount recommended for payment in these cases was £22,407, of which £1125 related to Welsh cases.

As IAs we are conscious that we see an unrepresentative sample of some of the worst cases. Many millions of customers will have received a satisfactory service from the SLC. This obviously limits our ability to draw any general conclusions about customer experience. Having said that, we acknowledge that even within the range of cases which we see, there are often encouraging examples of good practice – from extremely patient call handlers attempting to help sometimes very difficult customers, to clear and open explanations from customer relations officers seeking to find a satisfactory remedy.

We note that for 2020-21 the vast majority of the very small proportion of customers who were moved to make a complaint were satisfied with the response they received at the first stage of the SLC’s internal system. We also note that the majority of those complaints which were escalated to the second stage also settled at that stage. A number of the themes from complaints to which we want to refer this year have been raised in earlier annual reports, although we have identified others:

a) Vulnerable Customers – We have continued to see some quite serious service failures in the way that some vulnerable customers are dealt with. Most often, such customers suffer with disabling anxiety that is compounded by the stress of not only making a complaint but then also having to repeat to different advisers what that complaint is. Whilst we appreciate that logistically it would be impossible to identify customers who may be vulnerable at the outset, there are cases that we have reviewed, where it should have been obvious to call handlers that a customer was vulnerable. In such cases, a single point of contact or team dealing with customers who are struggling to understand a decision or disagree with it because it is potentially wrong, would be highly beneficial – not only to the customer themselves but also to the volume of calls that the SLC would otherwise receive. It is also important that promises or assurances about a call back from a manager or other team member are flagged up so that unnecessary distress and worry is avoided.

b) Arrears ‘written off’ but remaining on account – Complaints have arisen from customers who have been told by Debt owners such as Erudio that their loans have been written off but who are nevertheless found to be ineligible for funding because of outstanding loans on their account. More information needs to be given to customers at the point that loans are ‘written off’ as to what this actually means. The current situation is confusing for customers who mistakenly believe they no longer have any outstanding arrears on a previous customer loan and so will be eligible for further funding.

c) Standard of Stage 2 responses being better than Stage 1 – Whilst most Stage 2 responses reflect the position at Stage 1, we note that often customers are given information at Stage 2 that was not looked into at all at Stage 1. The result has been that the Stage 2 responses were often of better quality in terms of the information provided, than the Stage 1 response. That could potentially lead to customers missing out on information that they would not know about, because they did not progress their complaint to the second stage. We note that the new complaints process will involve a two as opposed to three stage process, with effect from the 1st of April 2021. Upon receipt of a complaint, a dedicated Customer Relations Officer will investigate and prepare a comprehensive response within 15 working days of receipt of a complaint. It is hoped that the comprehensive report will contain all relevant and detailed information and so will overcome the quality differences that we have noted.

6. Parliamentary and Health Service Ombudsman (PHSO) and Public Services Ombudsman for Wales (PSOW)

The PHSO and PSOW provide an opportunity for customers who are dissatisfied with the outcome of the three stages of the complaints or appeals process to seek a review through referral by their MP. It is worth noting that, contrary to some customers’ expectations, the Financial Ombudsman Service (FOS) does not have jurisdiction in relation to the SLC’s caseload save with respect to a narrow area of complaints between 1/4/2007 and 30/3/2015 in relation to Mortgage Style loans.

At the start of the FY, there were 12 cases that remained open. Of these, 6 progressed to investigation and 6 did not. Of the 6 that progressed to investigation, 5 were completed with the complaint being partially upheld in 4 cases and upheld in full in 1. Where a complaint was upheld in full or in part the PHSO required SLC to take further steps in the form of providing additional explanation or offering a higher ex gratia or consolatory award than the IA had recommended. We have routinely been kept informed of the reports of the PHSO by the SLC in the past year.

During this FY, the PHSO has requested information from SLC in 24 cases, of which 3 progressed to full investigation and 20 did not. The remaining case is with the PHSO Early Consideration Team.

The PSOW has requested information from the SLC in 4 cases in 2020-21 none of which progressed to investigation. The PSOW also confirmed a further 8 cases had been rejected. During the same period they also reported, after investigation on 1 case which had begun earlier. The complaint in that case had been partially upheld.

7. Recommendations

On the basis of our experience this year, our recommendations are as follows:

a) consideration be given to providing a written reminder to customers making a specific funding enquiry that no telephone advice should be relied upon and that funding can only be taken as certain when written confirmation is received

b) consideration be given to incorporating the question of ‘exceptional circumstances’ into the IA stage so that customers are given the opportunity to provide any evidence in support

c) consideration should be given to a single point of contact for customers that are vulnerable and ensuring that promises of further contact from line managers are followed

d) that parties to whom customer loans have been assigned and who have agreed to “write-off” loan balances do provide clear, contemporaneous information to borrowers that their future entitlement to customer finance may still be affected because full repayment has not been made.