Unspent student loan and HB

I presume an unspent student loan that has been saved counts as capital - can someone confirm that?  My client finished her course in 2008 (after a break of 2 years due to severe mental health problems caused by a HB fraud investigation because she hadn’t told them she had become a student - she was on IB so was still able to get most of her rent paid by HB and has paid back the arrears).  I have just discovered my client hasn’t spent her student loans because of continuing mental health problems but hasn’t declared this to HB and it appears HB didn’t add her student loans to her capital at the time of the investigation.  The investigation took place in 2006 and I am having problems getting information about the exact circumstances.  My client is single, is now on CB-ESA Support, has been on DLA LR mob and care since 2005 and got an increase to MR care from Nov 2012 so I have applied for a top-up of IR-ESA for her. I am about to inform HB of the loan situation - any advice on how best to do this would be very welcome. I have warned her about the likely overpaid HB but am aware her mental health is likely to deteriorate further.

I believe the student loan will count as income when it is paid and will become capital after the end of the period it is payable for