HARD-UP students could end up completely broke when they arrive in Lancaster for the start of the new academic year.

Computer problems at the Glasgow-based Student Loans Company mean loan payments may be delayed, leading to a financial crisis for poorer students who will be left without any means of support.

Locally, Lancaster University and St Martin's College will be forced to wait for payments from students for rents and course fees. And they may be called upon to offer a helping hand to those in extreme financial difficulty.

The problem will especially affect students who, as a result of new regulations, no longer receive a grant.

This week, Lancaster University bosses were playing down the threat. According to university spokeswoman Vicky Tyrell the loans crisis is "A national problem which all universities are having to deal with."

However, the Citizen understands that university bosses are meeting this week to develop a plan for dealing with the potential difficulties.

At St Martins College a spokeswoman claimed that the problems are "Not as bad as people have made out." She added "Provisions are in place for students in financial hardship. "

Local shops and pubs could be amongst the first victims of the students' hardship, with the traditional pre-Christmas boost to the city's economy severely threatened. Local landlords could also find students struggling to pay rent.

The cash worries could also extend to the financially troubled university and St Martins College. Universities and colleges now rely on money paid by students in tuition fees, funded through the loan system. Last year, Lancaster University collected over £100,000 on the first weekend of term.

Converted for the new archive on 14 July 2000. Some images and formatting may have been lost in the conversion.