BBC News education reporter
A further education college is using its own money to give financial support to students – following problems with the delivery of government allowances.
About 150,000 teenagers in England are believed to be caught in a backlog for the Educational Maintenance Allowances of up to £30 a week.
South Cheshire College is using its own funds to make emergency loans to help students stay in education.
A private company has an £80m contract to administer the allowances.
The Learning and Skills Council, which is responsible for the allowances, says it has been “pushing hard and complaining hard” to get the contractor, Liberata, to resolve technical problems including the crashing of the helpline.
With echoes of the problems with the delivery of the Sats tests in England, the LSC says that 400 extra staff have been hired by the private contractor to tackle the backlog.
South Cheshire College principal, David Collins, says the means-tested allowances “can be the difference between students continuing to study or dropping out and getting a low-paid job”.
So Mr Collins says that his college is offering to lend emergency payments to help with bus fares and meal costs – which will be repaid when the administrative problems are resolved.
The college principal, who is also president of the Association of Colleges, says students wanting to claim the allowances have been reporting jammed helplines and difficulties with online systems.
A college administrator trying to help students spent an hour unsuccessfully trying to get through to a helpline, says Mr Collins.
The administrative failings are putting at threat a very successful incentive for teenagers from low-income families, says Mr Collins.
“The allowances have been tremendously important.”
The Educational Maintenance Allowance (EMA) is a flagship scheme to encourage more teenagers to stay in education and to reduce the drop-out rate at the age of 16.
It provides a means-tested financial incentive to keep teenagers in learning – particularly in further education colleges – with the Association of Colleges expecting 600,000 students to receive the payments this year.
The allowances are run on behalf of the government by the Learning and Skills Council – which has contracted out the administration to a private company, Liberata.
Liberata is an outsourcing company, with a majority stake owned by a private equity company with offices in the United States. Liberata has a six-year contract worth £80m to deliver EMAs and other projects for the LSC.
The LSC estimates that about 150,000 applications are experiencing delays caused by technical problems.
But Trevor Fellowes, director of learner support for the LSC, says no student will suffer financially from the delays, with payments set to be backdated.
Mr Fellowes says that the phone helpline system has not performed adequately and on occasions has crashed completely. Plans for an online system had already been postponed, he says, and the contractor is processing applications semi-manually.
Mr Fellowes said he was confident that the problems will be resolved.
The National Union of Students’ president, Wes Streeting, says “It is unacceptable that students up and down the country will be left to struggle due to administrative incompetence. These delays and difficulties must be resolved as soon as possible.”