MP John Pugh has welcomed the resignation of the Chief Executive and Chairman of the Student Loans Company, following problems many Southport students experienced in recieving their loans, and which he predicted would happen.

Problems occurred after the Government granted the Company the right to process all loans in England, taking over from local authorities. Delays in processing applications last year led to thousands of students penniless. The company admitted that it had taken on too much responsibility, and were unprepared for the increase in the loan volume.

Dr Pugh wrote to then Minister for Innovation, University and Skills, David Lammy, protesting against this centralisation. "I wrote to him highlighting my concerns about centralising the entire process. I envisaged that the company would be overstretched, and that tracing loans would be far harder when based at an entirely national as opposed to local level. Essentially I was concerned that this would turn out to be yet another example of government-inspired improvements which prove to be exactly the opposite.

"Many Southport students came into the office asking for help getting their loans paid, and I had first hand experience of how difficult and frustrating it was trying to trace what had happened to payments and personal information sent that was lost in the extensive bureaucracy of the company. Some people I helped had been waiting for payments for over five months.

"I hope the chaos caused and the following resignations will lead to a fresh and stronger leadership. The company has to ensure it has the capacity to deal with the volume of loan applications."