THOUSANDS of East Lancashire teenagers bound for higher education could be left without cash at the start of term after it was revealed that the system for processing student loans was in chaos.

Lancashire County Council confirmed today that the procedure for calculating how much money students will be entitled to is running weeks behind schedule.

The county council, which also processes loan applications on behalf of Blackburn with Darwen Council, has blamed the crisis on the late arrival of new government software that transfers information to the Student Loans Company.

If the software had arrived on time, it would have allowed student loan eligibility forms to have been sent out to students in May and returned by June 7.

But thousands of students - who already face a stressful wait for their A-level results - only received the eligibility forms during the past fortnight and many have not yet filled them in.

Some students are now worried that they may have to start university life in September without any loan cash.

One Colne student, who has applied for a place at Nottingham University in September, received a letter from County Hall, which said: "Regrettably, our Student Support Services are facing delays in the release of new computer software to enable us to release eligibility notification forms." Another student, who lives in Burnley and who wants to study at the London School of Economics, received his eligibility forms on July 10. He said: "The forms say on the front that they must be filled in and returned by June 7! When I telephoned to find out what was going on, I was told it would be between six to eight weeks."

County Coun Hazel Harding, chairman of Lancashire County Council's Education and Cultural Services Committee, said: "The new software did not arrive until July 12 and we have had to test it and train staff to use it.

"Parents and students will be aware that the new loan forms are more complicated and they take us four-times as long to process as the previous forms. "In previous years we managed to deliver cheques to our students in time for the start of their courses if they applied on time. Despite the problems we have been presented with this is still our aim."

She said County Hall staff were working hard to make sure they delivered the information on behalf of the county's 23,000 students.

A spokeswoman for the Department of Further Education refused to comment on Lancashire County Council's claim that the software had arrived late.

But she said: "It is our firm expectation that students will get their money on time.

"There is no reason for parents to worry. Many authorities have already accepted applications and have passed on the information to the Student Loans Company."

"Most of the remainder will be doing that in the next two weeks."

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