A Sunday Times investigation this weekend claimed that “suspicious loan applications” totalling almost £60 million have been identified by the Student Loan Company (SLC) in the 2022/23 academic year – with fears that the true sum could amount to hundreds of millions of pounds.
It alleged that most of those under scrutiny are enrolling at franchised universities – which the report characterised as “small colleges paid to provide courses for established universities but [that] often have low grade requirements”.
In September, the OfS issued a briefing notice to universities over concerns that students on some franchised programs had cheated on assessments, claimed for finance they were not entitled to or been encouraged to enrol on courses that they had no intentions of completing – “resulting in tuition fee payments being made in relation to students who should have been withdrawn from courses”.
After the note was sent, suspicion began to mount on six providers in particular, the article claimed, one of which is named as Oxford Business College.
The report suggests that Romanian students in particular are taking advantage of the loans system, with “leaked government figures” revealing that the number of Romanians living in the UK applying for a student loan surged to 84,000 in 2023/24, meaning that some 15% of this group was issued a student loan during this time.
European students, including Romanians, are entitled to apply for a student loan in the UK if they were residing in the country by the end of the Brexit transition period at the end of 2020.
The claims have drawn concern from government and sector officials, with education secretary Bridget Phillipson saying they “point to one of the biggest financial scandals in the history of our universities sector”. She pledged that the government will “act quickly” on The Sunday Times’ findings “to make the fundamental changes that the system badly needs”.
Responding to the allegations, a statement from Oxford Business College says the claims are being treated with utmost seriousness. “OBC upholds the highest standards of integrity, compliance, and academic excellence,” it states.
In an effort to regulate university franchises more forcefully, Phillipson is also consulting on legislation that would make all of those with over 300 students be regulated by the Office for Students.
This was announced on 30 January – when the government revealed that more than half of current providers are not registered with OfS.
Phillipson announced she was also asking the Public Sector Fraud Authority to co-ordinate immediate action and promised new intervention powers for the OfS.
The education chief also highlighted a concern regarding use of agents. The Labour government will “put an end to the abuse of the system by agents recruiting students based in this country: this government believes they should have no part to play in our system whatsoever”, she stressed.
“I have also asked the Student Loans Company to further step up its investigative work,” continued Phillipson.
“I know people across this country, across the world, feel a fierce pride for our universities. I do too. That’s why I am so outraged by these reports, and why I am acting so swiftly and so strongly today to put this right.”
Sometimes [university franchises are] entirely justified because there are cold spots, parts of the country where there is not a university, but where people want to study for a university qualification locally
Lord David Willetts, former universities minister
Meanwhile, former universities minister and Conservative politician Lord David Willetts was questioned on the claims on BBC Radio 4. While he supported the government’s plans to force operators with more than 300 students to be under the jurisdiction of the Office for Students, he also defended the use of franchised universities in “cold spots” where there are no other universities locally.
“It’s absolutely right to act,” he told listeners. “There is no justification whatsoever for bogus courses and students who don’t intend to properly study on them.”
He added: “Sometimes [university franchises are] entirely justified because there are cold spots, parts of the country where there is not a university, but where people want to study for a university qualification locally.”
It is not the first time that loan issues for students studying at non-traditional providers has come to the fore. In 2015, a report published by the Public Accounts Committee found that £3.84m of public money was given to ineligible EU students through student loans.
- To purchase and read our 28-page Snapshot Digest into Franchise providers in the UK, with a profile of the largest operators in this space and with publicly available financial information listed, for a fee of £2,000, click here.
