BUREAUCRATIC delays have prevented a third of teenagers who applied for Education Maintenance Allowances from getting their hands on the much-publicised grant.
In some colleges as many as half of students who applied for the allowances are still waiting for their first weekly payments, which they were meant to get from the beginning of term.
EMAs were set up to encourage 16 and 17-year-olds from poorer families to stay in full-time education after school by helping them with living expenses grants, worth up to pound;30 a week.
The scheme went national last month after being tested in pilot projects around the country last year.
Latest Department for Education and Skills figures show that 330,000 applications have been made for the means-tested subsidies.
It says 200,000 applications have been accepted and 12,000 turned down.A further 13,000 applications are with Capita, the private firm which is running EMAs on behalf of the DfES.
The rest, the DfES says, have been held up because Capita is still awaiting bank details, proof of parental income or identification. Applicants are also required to have a bank account.
There is increasing evidence that students are baffled by the EMA system.
Many who benefited from the pilot scheme were unaware they had to re-apply for year two until their money stopped coming in last month.
And colleges have been contacted by anxious teenagers asking for documents to support their applications for bank accounts.
The problem is acute in Merseyside, where the EMA scheme was run as one of last year's pilots.
Pat Bacon, chair of the Merseyside College Association, said there is no sign that the national version of EMAs, which attracted criticism for the way they were managed last year, is any better.
Ms Bacon, who is principal of St Helens' college, said the problems surrounding EMAs were discussed by college heads from across Merseyside last week.
Around half of the applications from Merseyside are still being processed.
She said: "We estimate that of 1,000 students affected, about 500 have not been processed. I don't think we have lost any students yet as a result of this but as time goes on we could have a problem.
"Across Merseyside, that is about the same. My biggest concern is we, the colleges, take the blame for this when it is not a situation of our making.
My understanding is that individual applications are taking a lot of time.
"It is not very clever to blame the students. Some of them only got their results in August and have not had much time to decide what they are doing next. They have to consider other options such as work-based learning as well as FE.
"For some of these students, completing this paperwork is a big challenge.
"There have also been problems with the national helpline, which I understand crashed altogether last week because it could not cope with the level of activity."
EMAs are available for any course which involves at least 12 hours of "guided learning" per week.
If the annual household income is under pound;19,630, students get the full pound;30 a week. Smaller grants are available for teenagers from families with incomes up to pound;30,000 a year.