The number of students applying for emergency maintenance payments has soared as tens of thousands still await funds from the Student Loans Company after their courses have started.

A fortnight into the academic year, applications by students for money to tide them over have risen by 550 per cent on last year at one university, a survey by The Times has found.

The figure emerges days after David Lammy, the Universities Minister, ordered an inquiry into the fiasco that has left 88,000 students stranded without loans. Many have had to use credit cards, borrow from parents and friends and take on temporary jobs to pay for their first weeks of term.

The loans company, a quango overseen by Student Finance England, has failed to cope with an 8 per cent rise in applications since last year. It is also struggling to administer maintenance grants, which it has taken over from local authorities. Technical problems and a flurry of late applications were to blame, it said.

The company was tarnished further last week when it emerged that it had spent more than £1 million last year on first-class rail travel, team-building events and consultants.

Of the 20 universities that provided figures to The Times last week, the University of Exeter had had a 550 per cent rise in applications for funds. Aston University, Birmingham, has made 64 crisis payments this year compared with 21 at the same time last year — a 154 per cent rise. Handouts at the University of Nottingham had risen to 64 this year from 31 last year.

Wes Streeting, president of the National Union of Students, said yesterday: “Much of the interim support has been provided from the Access to Learning Fund, which has been cut by 30 per cent over the last four years. We are very concerned about how long this vital source of support for students will last this year.”

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