'We may need to sell the house': Student facing £18,000 bill over funding error

Vlad Iordan knew going to university meant borrowing money he'd eventually have to pay back, but he didn't think he would face an £18,000 bill while he was still studying.

He is in his second year of a business management degree at London Metropolitan University but may be forced to sell his home to pay back maintenance loans he received incorrectly.

"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.

The 32-year-old logistics manager is one of 22,000 students who have been given maintenance loans and grants they weren't eligible for due to an error.

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

Blame game

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

The government-owned Student Loans Company (SLC) has said the error was caused by universities incorrectly categorising distance learning courses.

But London Metropolitan University and a group of eight other institutions disagree.

The universities have formally indicated their intention to pursue legal action.

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What happened to Vlad?

Vlad told Money he was given £17,739.78 over two years but received an email on 23 March telling him his final payment had been blocked.

It has now been cancelled, and he has been told he will have to pay all the money back.

"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," he said.

To study part-time, Vlad had to take a monthly drop of around £300 in his salary.

"At the moment, I'm just working to pay the bills. Now, because they have said to us that we're not entitled to the loan and we have to pay it back, I am thinking about doing a second job," he said.

"My wage is not great, and if I didn't have my wife, I couldn't stand to support my house... I said to her that if it comes to it, we may actually need to sell the house."

'I've lost faith in everything'

Unlike tuition loans, maintenance loans go directly to students and are paid in instalments.

They are used to help cover living expenses while studying and are means-tested. The highest amount that students can claim each academic year is £13,762.

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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.

He was only given just over a week to decide what to do - and neither option gets rid of the obligation he faces to pay the SLC back.

Vlad is now exploring taking legal action.

"I've lost my faith in everything because I don't believe the university and the Student Loans Company are going to do anything to benefit us," he said.

SLC and government say universities must act

Vlad isn't the only one - there's a legal row brewing between the SLC and the government, and some of the affected universities.

The government's case is that universities must rectify the error.

The 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.

"The Department for Education and the Student Loans Company are clear that providers are responsible for ensuring that courses are classified correctly and that student-facing information must reflect accurate attendance requirements, including weekday attendance where this is a condition of maintenance support," an SLC spokesperson said.

Bridget Phillipson, the education secretary, said: "This is not students' fault. Too many organisations have let their students down through either incompetence or abuse of the system.

"Universities must take immediate action to support students who will face financial difficulties as a result."

Universities blame 'abrupt' change

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.

"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.

Vlad still thinks there's a way out for people like him, if changes are brought in more gradually.

He said: "Let's keep these things how they were for the students that are already enrolled and start with the new rules fresh for the ones that are starting in future years. If they want to make it straight, that's the best thing to do."

What happens next?

The Student Loans Company and universities have contacted all students affected by the error.

They will have the option to repay the amount in full, via an agreed repayment plan or through a deduction from their future funding entitlement.

"We fully appreciate students will be concerned about this action; however, SLC is required to ensure that public money is used to support student finance as set out in the student finance regulations," the SLC said.

"Following the courses being correctly classified and students being advised of their reassessed entitlement, customers will be able to make arrangements with SLC to ensure they are supported through this process, including affordable repayment plans being put in place where appropriate."

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: 'We may need to sell the house': Student facing £18,000 bill over funding error