Student loan fraud under investigation by authorities

The Student Loans Company (SLC) has reported an increase in suspicious applications involving fake documents.

The fraudulent activity involves students using false identities to claim student finance without any intention of studying.

The SLC identified fraudulent finance claims worth up to £3.7m in 2024 alone. 

Six institutions, including Canterbury Christ Church University, are under investigation for students fraudulently claiming over £7 million in student loans since 2022. 

Most of the students under investigation are believed to be enrolled at "franchised universities", colleges that are contracted to deliver courses on behalf of established universities. Franchised providers typically have lower admission requirements, making them more prone to student loan fraud since fraudulent applications are more likely to be approved. 

Some franchised providers even accept screenshots of Duolingo, a language learning app, as proof of English proficiency.

Fraudsters have been discovered receiving their first maintenance loan payment, withdrawing from their course, and then reapplying the following year to claim the loan again.

There have also been concerns of ‘organised recruitment’ where recruitment agents use TikTok to advertise free laptops, and free student finance. In exchange, the recruitment agents take a proportion of the student’s loan payments.

In response, Education Secretary Bridget Phillipson has called for an investigation into this student loan fraud. 

Phillipson has further called on the Public Sector Fraud Authority (PSFA) to take action. The PSFA works with the government and public bodies to help reduce fraud.

The Education Secretary plans to introduce legislation giving the Office for Students (OfS) more power to regulate franchised colleges and safeguard student finance.