The chairman of the beleaguered Student Loans Company was sacked by ministers, it emerged today.
Chief executive Ralph Seymour-Jackson has also stepped down after new universities minister David Willetts indicated he had "no confidence" in him, the Department for Business, Innovation and Skills (BIS) said.
Mr Willetts asked chairman John Goodfellow to leave and told him that while it was a matter for the board, he had no confidence in Mr Seymour-Jackson.
It comes after a healthcheck of the SLC - ordered after last year's widespread delays to payments - found there are still causes for concern.
Tens of thousands of students faced delays to their loan and grant payments last year as the SLC struggled to keep up with demand.
A damning report into the delays, published at the end of last year, found there had been "conspicuous failures" which had a "far-reaching impact" on students.
A spokeswoman for the Department for Business, Innovation and Skills (BIS) said: "Universities Minister David Willetts asked Mr Goodfellow to step down and indicated to him that while it is a decision for the board, he had no confidence in Mr Seymour-Jackson."
A check-up ordered by the previous government today concluded that it was "surprised by the lack of focus and urgency" in addressing the recommendations made in Professor Sir Deian Hopkin's report in November.
The Hopkin report laid blame on technical, management and services failures at the company for the "poor experience" of the many students using the system.
PricewaterhouseCooper's healthcheck found that as of the middle of April, 264,000 applications had been registered - around 30% of the expected total of 880,000 this year.
Of those registered, 114,000 have been processed for payment, 117,000 are pending and 25,000 are currently being dealt with.
It means the SLC will need to deal with a maximum of 760,000 applications in around 100 working days up to the end of September, assuming that all applications are received by the deadline.
The report also found that the SLC's call centres are short of 100 people needed to meet call targets at the peak of applications.
And the company has failed to provide their customers with assurances they need to rebuild the relationships that were damaged by last year's events.
The SLC's executive team is "under-resourced, stretched and unable to give the breadth of leadership and direction required through the next five months of this year," it says.
The report concludes: "The resilience of the organisation to deal with crisis and frame appropriate interventions - particularly in terms of governance, leadership and the progress still required on provision of operational management information - is still in a state that gives cause for concern."
Business Secretary Vince Cable said: "Last year's crisis in the Student Loans Company caused real upset for students and their families, many of whom lost confidence in the system. We must avoid a repetition of the problems.
"I believe a new chair and chief executive will provide the fresh leadership needed to deliver the remaining changes necessary for an improved service to customers this summer."
Mr Willetts added: "Last year the service fell short of what students and their parents had every right to expect. While improvements have been put in place since last year, we are not out of the woods yet.
"Having read the latest report on the SLC by PricewaterhouseCoopers, it is clear that urgent changes to the leadership are needed to ensure students get the service they deserve."
Sir Deian has been appointed interim chair.
The chairman of the SLC is appointed by ministers, while the role of chief executive is a matter for the SLC's board.Reuse content