Around 2,450 fraudsters made applications for student cash from the UK and European Union – and 875 payments were made before the false claims were spotted.
The Student Loans Company (SLC) – the organisation running the system – claims organised criminal gangs are deliberately targeting the organisation, and that the SLC has a special team working with police to detect fraud.
The fraudsters are stopping loan payments to genuine students while the SLC check the validity of some claims.
The number of claims suspended in the past academic year were triple the level of 12 months earlier, and have surged to seven times the number in 2009.
However, the SLC points out that the total number of bogus claims is small in comparison to the total number of loans – running at around 1%.
Paradoxically, as the SLC becomes better at detecting fraud, the number of false claims increases.
Anti-fraud measures stopped £13.8 million of misappropriation of funds, but the SLC acknowledges not all false claims are detected.
In May 2013, scammers who stole £380,000 from the SLC were jailed for a total of seven years. The crooks sold forged exam certificates to fraudsters who posed as students to apply for loans.
The gang charged £1,000 for the forged documents and demanded a slice of any loan payment.
Separately, the year before, crooks targetted students in an email phishing scam. Thousands of spam emails were sent out asking students to update their bank details online.
Those that responded were directed to a clone site which recorded the details allowing the scammers to access the accounts and withdraw £1.6 million.
Heather Laing, the SLC’s fraud prevention manager said the organisation had a team of 24 dedicated to combatting fraud.
"Students are often targeted at the three main instalment dates in September, January and April and they need to work with us to ensure their identity and financial details are protected and not compromised," she said.
