NUS has written a letter to the Children, Schools and Families Select Committee to call for an inquiry into delays in education maintenance allowance (EMA) payments.
Beth Walker, NUS Vice President (Further Education), said: "NUS is fully behind these calls for an inquiry into the EMA shambles. More than 110,000 young people are still waiting for a decision on their applications over a month after the start of the academic year. This money very often makes the difference between participating in education and being forced to drop out and enter low paid work.
"Over the course of its six year contract, Liberata will be paid £80 million to administer EMAs - in this context, the £3 million fine it has so far received does not come close to addressing its ineptness and mismanagement, nor the risks to which it has exposed students across the country.
"NUS has written to the Children, Schools and Families Select Committee, requesting that it use its full powers of scrutiny to examine the root causes of these failures, in order to ensure that such a situation never arises again."