Students have been thrown a financial lifeline by the Learning and Skills Council (LSC) after being denied their education grants by a bureaucratic log jam.
The quango has stepped in, offering to provide funding for colleges that fear students could fail to attend after not receiving their education maintenance allowance (EMA) at the start of term.
Of the 450,000 students due to receive the pound;30-a-week grant, 150,000 were affected after Liberata - the firm that processes the payments - experienced difficulties with its computer systems and telephone helplines.
The allowance is designed to help 16- to 18-year-olds with essential expenses such as travel, books equipment and meals.
It is also intended to take the pressure off low-income families who might be reluctant to encourage teenagers to stay on in education, preferring them to contribute to family expenses by getting a job.
Liberata was chosen to administer the scheme by the LSC, which funds colleges, through the competitive tendering process required by European law.
Mark Haysom, the council's chief executive, said: "The LSC has put in place support for colleges to help those students affected by delays to their EMA payments. Sixteen to eighteen-year-old students eligible for the EMA can now get interim support from their college.
"For less well-off students to be starting courses without funding is simply not acceptable. We've written to colleges about accessing support to help those students affected by the delays."
Mr Haysom added: "Liberata, the company hired to process the applications, has now taken on extra staff to speed up the manual application process as a matter of urgency, following problems with the IT system and helpline."
"This is a very regrettable and distressing situation. It is a matter of the utmost priority to resolve this issue swiftly.
"The funds are available for those in hardship who would not be able to attend or participate effectively as a result - such as not being able to pay for public transport, books, meals or essential course equipment."
The National Union of Students lobbied the LSC to help students through hardships caused by the delay to the payments.
South Cheshire College was singled out for praise by the union for helping students from its own funds. But many other colleges have also found the cash to fund hard-up students from their own coffers, which will be reimbursed by the EMA scheme at a later date.
Beth Walker, NUS vice-president for further education, said: "We are pleased that the LSC has heeded NUS demands that it address immediate funding pressures so that colleges can make payments to support young people and keep them in education while catastrophic delays in processing EMA applications are resolved.
"These delays have deeply affected many students at the start of the academic year. There must be a thorough investigation into these delays, and a full review of the LSC's contract with Liberata, which has put hundreds of thousands of students' education at risk."
The LSC said it was working with Liberata to sharpen up its payment systems.
The Adult Learning Grant, although processed by the same US-owned company on the LSC's behalf, has not been affected.
Liberata employs 3,000 people at 20 locations around the UK. The company said further recruitment will bring the number of extra staff up to 700.
It intends that all payments will have been made by the end of the month.
A spokesman said: "There are 150,000 learners who are experiencing delays caused by technical problems, specifically the helpline. Liberata has hired hundreds of additional staff to speed up the application process until these issues are resolved."