Students will receive their loans on time this summer, despite technology problems that threatened to delay the payments.
Processing of applications was affected by the slowness of the web-based system, but the problems have been addressed and all students who applied on time will be paid on time, according to the Department for Education and Skills.
"There were some initial teething problems that are being dealt with and we are well on the way to ensuring that all students are paid on time," said a spokeswoman.
The Protocol system was rolled out to local education authorities by the Student Loans Company earlier this year.
A document leaked to vnunet.com's sister title Computing showed that just six weeks ago there were significant problems, with up to 2,000 loans at risk of not being assessed on time.
Delays in providing some key functionality meant that staff had to re-enter applicant information manually.
Another local education authority suggested that the system had improved, but not enough to solve the problem.
"All students who applied on time may be paid on time, but that may not be as a result of following the usual process but as a result of emergency payments," said the source.
Liberal Democrat education spokesman Phil Willis stated: "It is shocking that these crucial documents are being dealt with by an expensive computer system that is not up to the job.
"Ministers must come clean over the cost of the Protocol and the chaos it might cause."
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