Two men were jailed for their part in the fraud last year, while two are awaiting trial.
In August 2011, Metropolitan Police officers were tipped off about a criminal gang who were contacting students on the student loan scheme and asked them to update their bank account details on a fake website that captured their account details and passwords.
The fraudsters then grabbed loan cash of up to £5,000 at a time from the accounts.
Detectives from Scotland Yard, plus the UK Border Agency (UKBA) and Greater Manchester Police, raided homes in Manchester to recover documents and computers suspected to be used in the scam.
A 28-year-old man and a 33-year-old man were arrested on suspicion of conspiracy to defraud and money laundering, and a 30-year-old man on suspicion of handling stolen goods.
All were bailed.
Police have frozen several bank accounts believed to have been used to launder stolen money. A fourth man was detained by the UKBA for entering the country illegally, while a woman was detained for over staying on her visa.
Last year, Damola Olatunji, 26, from Manchester, was jailed for six years and six months after pleading guilty to two charges of conspiracy and a money laundering offence. Amos Mwangi, 25, from Deptford, London, was jailed for three years and three months after admitting two fraud charges.
Meanwhile, the Student Loans Company is warning students not to disclose their bank account details.
“The Student Loans Company want to make it clear that they will never ask you to update your bank details by email, or verify your student account details online” said a spokesman.
If you receive a mail asking to validate bank information, ignore it and delete immediately, said the spokesman.
