Disabled student's case on student loan is upheld.

The Public Services Ombudsman has upheld a disabled student's complaint about the stress he suffered over the management of his grant claims. The student, known as Mr K, said Gwynedd council made unnecessary grant reassessments and unreasonably withheld payments of his disability allowance. The report blamed a "catalogue of communication failures" between the council and the Student Loans Company.

The ombudsman proposed the council and SLC jointly pay Mr K £700 compensation. Mr K had been awarded an assembly learning grant by Student Finance Wales to study a PGCE education course at a college in north Wales in 2006. At the time he was also studying for a PhD at another university for which he was claiming a disabled students' allowance.

He complained that following his withdrawal from the PGCE course in December 2006 on health grounds, Gwynedd council made unnecessary re-assessments of his grant entitlement. As a result he received demands from the Student Loans Company (SLC) seeking the repayment of all or varying parts of the grant.

The SLC then withheld payment of his disability claims pending repayment of the grant which it maintained had been overpaid. He said that as a consequence he suffered stress and financial hardship. Mr K said that neither the council nor the SLC responded to his complaints adequately, and that each blamed the other.

According to the ombudsman's report the council and SLC failed respectively to make accurate reassessments and to correctly issue overpayment recovery letters to Mr K following his withdrawal from the PGCE course. It concluded that the council and the student loan company also failed to effectively communicate with each other to resolve the difficulties surrounding Mr K's grant claims. Instead, they blamed each other and withheld payments to which Mr K was entitled.

The ombudsman, Peter Tyndall, who investigates complaints of injustice caused by the failure of public services, said: "This is a case where a service user was courteous in pointing out errors to service providers - who entirely failed to respond to his legitimate concerns, leaving him struggling to manage as payment after payment was missed. The agencies didn't speak to each other and put their systems before the person."

The council and the SLC have since indicated to the ombudsman that measures are being taken to prevent the failures which occurred in Mr K's case happening again. Student loans have been in the spotlight recently for delays in their provision and over calls that interest rates should be increased on payments.