SL approved! months later restricted because of CP

This is my story, somebody help me!....can I take legal action?

I wanted to go back to school to get training to become a Veterinary Hospital Assistant.  The school I wanted to attend was in Kelowna BC.  The Centre of Arts and Technology.  Being from Alberta I applied for more student loan funding to the Alberta Government and they approved me for $10,600.  They are even re-assessing that now to give me $19,900 because I underestimated the cost of living and require more funding. They sent me the certificate and everything and I had the school sign it and I sent it to National Student Loans so they could release the funds to me.  Because I was approved I went ahead and moved to Kelowna and am now a month into studies.

National Student loans are now telling me that they can't release my funds to me because of a restriction on my file.  So, I called ALIS (Alberta student loans) and they said it should be fine and there is no restriction on my file and I should get the money.  I called back NSLSC and they said nothing can be done to lift the restriction because I had filed a consumer proposal.

I did file a Consumer Proposal in September 2008.  BUT I didn't include my student loans in it and kept up to date with all the interest payments and didn’t miss any payments on my student loan!  The restriction is because of a policy the government has set up that if anyone has filed a consumer proposal or gone bankrupt they can't receive more funding because a restriction will be placed on their file even if they have continued to pay their student loan and kept up with interest and didn’t include the student loan in the their creditors.

 The only way to lift that restriction is for your student loan to be in repayment status for 3 years or the old balance is paid in full.  That would then lift the restriction and they would allow more funds to be released.   Is it just me or does that sound a little crazy, I’d still be in the proposal but since I cleared up my old “tainted” balance they would just go ahead and give me more money that I would eventually owe them.   Seriously, if they knew I was up to date of payments and I am eligible for more funding, why wouldn’t they just clear the restriction and add my new funding to my previous balance.????

THEN I was told by an ALIS representative that I could get a signed letter from my Trustee reinstating my student loan to ensure that it had nothing to do with my proposal and that it should change the status that NSLSC had on my file and they would be able to release my funds to me.

NSLSC is saying ALIS "screwed" up by saying I was approved and that the letter does nothing to change my status and they are telling me sorry but you were given wrong information and it is unfortunate but there is nothing more we can say to you.  Which is understandable but I didn't know any of this information before and now I’ve moved to a different province, a month into school and no way to pay for anything.

Can they do that?  Approve me for money and let it get to the stage of sending me the certificate and then not give me the funds?  No one had even contacted me to tell me that there was an issue. I had to call them to see why it was taking so long.  I'm confused and stressed and not sure what to do. 

Is there anything I can do with ALIS since they say there shouldn't be any restrictions and am entitled to the money...?

Like I said, someone please help me!