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Foreign unis struggle with US loan regulations

A number of HE institutions that do not award their own degrees are caught up in “legal limbo”; unsure of whether or not they are able to continue to participate in the student loan scheme that subsidises thousands of Americans studying overseas. Meanwhile some have been notified of their “disqualification” and are lodging an appeal against the decision, which will restrict their American student population.

"External degrees can be a very effective way to demonstrate high-quality teaching"

After a surprise change to Stafford loans regulations was posted online last year, many of the affected educators (or “Listed Bodies”) – including world-leading institutions such as the London Film School and Trinity Laban – say they have sought clarification from the US Department of Education, but had little response, The PIE News has learnt.

Jenny Roberts, president of the International Education Council, an organisation devoted to advising foreign institutions participating in US government loans programmes, said it had left universities and their US students in a “very dangerous position”.

“There are many students who are on these courses now and might have to withdraw,” she said. “They may be lucky enough to take out more costly priced loans but there’s no guarantee of that.”

Some 43,000 Americans study abroad each year and all can access Stafford loans, which are worth up to $20,000, have favourable interest rates and must only be paid back after graduation.

“There are many students who are on these courses now and might have to withdraw”

Last November the DOE decreed that only institutions that “directly award degrees” were eligible to participate, in what it says was an effort to help deter fraud.

Educators complain they were not directly informed of the policy change, with some such as Shirley Streete-Bharath, head of operations at the London Film School (LFS) “discovering” it at a conference. “It was not the best way to find out something as serious as that,” she said.

The school, which offers degrees validated by London Metropolitan University, only receives about 17 American students per year but this amounts to US$700,000 in loan money.

For now, LFS is continuing to accept American students but telling them they will not have access to the susbsidised loans.

The new rule affects institutions everywhere, but in the UK, which is home to hundreds of non-degree awarding universities, top conservatories such as the Guildhall School of Music and Drama and the London Academy of Music and Dramatic Art are likely to be affected.

“We are a small, specialised, creative institution. The UK authorities accredit us in our own right”

Liverpool Institute for Performing Arts (LIPA) confirmed it had been notified that it was no longer eligible under the Stafford scheme rules. “This will affect continuing students who have previously been in receipt of direct loans and new students planning to enter this September,” said Director of Sales & Marketing, Corinne Lewis. “We disagree with the US Department of Education’s interpretation of the legislation.

“Together with several other institutions that are similarly affected, we are in the process of lodging an appeal. We are a small, specialised, creative institution providing distinctive higher education degree programmes. The UK authorities accredit us in our own right.”

At a speech at the annual Higher Education Funding Council for England in Autumn, Universities and Science Minister David Willetts promised to talk to Martha Ketner at the US Department of Education, to explain the problem. “While so-called Listed Bodies in our system do not have their own degree awarding powers, all of their students on validated courses graduate with degrees of equal standing to students taught at the awarding body itself,” he argued.

“Indeed, I have always argued that external degrees can be a very effective way to demonstrate high-quality teaching.”


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