It has been revealed that still; thousands of students are waiting for their financial applications to be processed by the Students Loans Company.

The service has been unable to process them in time for the start of the academic year, because they received a record number of requests for loans.

The financial downturn has meant that 16% more students want a loan, as family funds dry up due to mounting personal debt.

Several students have commented on the chaos. A St Anne's student whose loan wasn't paid until Christmas said: “They do seem ridiculously disorganised.”

Another stated: “I will not be receiving my student loan until January, and I think it's appalling. I am fortunate enough to be able to live of savings until then, but it's such a pain to have to have to re-organise my finances.

“I can't imagine how disruptive it must be for those who have to find other means,” they said.

A spokeswoman for the SLC commented: “This year we have received a record number of applications and calls and an unprecedented number of late applications - 120,000 over a four week period. However, already more than 750,000 students have had their applications for funding approved.”

She further explained: “We have put in place a number of measures for students to follow the progress of their applications and to address the problems some people have had trying to get through to our customer advisers. These include additional telephone lines, additional staff and directing customers to the website to find answers to common queries.”

Despite these schemes, hundreds are still without loans. However, students in Scotland appear to not be suffering from the same problem.

This is because the Students Awards Agency for Scotland (Saas) said they prepared themselves for a 10% increase in applications due to high levels of unemployment and low demand of jobs.

The Saas also noted that they have been meeting its targets of processing applications within 21 days of receipt in almost all cases.

They achieved this by making more telephone lines available, employing more staff, increased working hours and has put in extra aid to handle visitors to its office.

Wes Streeting, the President of the National Union of Students, has strongly criticised the SLC for the problems: “I'm absolutely furious at the bizarre claim of the head of Student Finance England, Ralph Seymour-Jackson, that delays to the payment of loans to 50,000 students are ‘reasonable'.

“Tell that to the students I've spoken to who are panicking about how to pay rent, pay bills and pay for food. He must have been speaking live from Cloud Cuckoo Land!”

SLC response

Ralph Seymour-Jackson, chief executive of the SLC, apologised to those affected saying: “The problems with phone lines are real. We're not pretending any different. Students are struggling to get through and we can't pretend otherwise. For that we apologise unreservedly and ask people to use the website as much as they can.”

He blamed the unexpected rise in late applications and the economical crisis, for the delays in student loans.

He added: “We are telling our staff they can have all the overtime they want. But the applications are unprecedented.”