GSM students count the cost of ministerial experiments

Conversations with students at the failed for-profit provider reveal much about its business model and the Department for Education’s judgement, writes John Morgan

August 7, 2019

Recent ministerial experiments in English higher education policy – rapid expansion of for-profit providers, the introduction of a “market exit” regime for failing institutions – are very real for the students filing in and out of GSM London’s building trying to find out whether they will end up with a degree or not.

GSM, previously England’s biggest for-profit college in terms of its number of students with public student loan funding, announced on 31 July that it had entered administration and would cease teaching at the end of September, after running into problems recruiting and retaining sufficient numbers of students. I visited its campus in Greenwich, south-east London, to speak to students and find out what they had been told about their prospects for transferring to other institutions to complete their courses.

Those conversations confirmed that GSM, ultimately owned by private equity firm Sovereign Capital, has been recruiting from a particular disadvantaged student “market”: mature students, many of them needing courses timetabled to give them scope to look after children. Many of the students were taking courses that joined up a degree with a foundation year, intended to bring up to speed those without the usual qualifications needed for a degree.

GSM occupies a large brick Art Deco building, formerly Greenwich Town Hall. The looming clock tower offers a guide to the campus from the Underground station.

The college, formerly known as Greenwich School of Management, was established in 1973, but in its modern guise it is a creation of government policy. GSM rapidly expanded after 2011, when it was bought by Sovereign Capital – the fund established by Lord Nash, who left it in 2013 to become a Conservative schools minister – as then Conservative universities minister Lord Willetts pursued a policy of allowing “alternative providers” uncapped growth in their numbers of students with public loans.

That policy was an unsuccessful attempt to expose lower-tariff universities to competition and drive down their fees. It resulted in £152 million of public money being sunk into GSM via tuition fee loans in the six years to 2017.

I spoke with GSM students on business management, event management, and travel and tourism degrees – all validated by the University of Plymouth.

The students have been told to attend meetings at GSM on 7 August, when tutors will detail their options for continuing their courses at another institution.

One student told me she had left her job at Tesco to start her course, has two children and has taken out between £18,000 and £20,000 in student loan borrowing. The uncertainty over whether she would now be able to complete her course was “affecting me mentally” and she has been unable to concentrate on her coursework, she said.

“We don’t know what’s going to happen,” said another student, Jamila, 28, who has been studying at GSM for two and a half years, starting with a foundation course.

Jason Charles, 38, said he was happy with the support from GSM tutors and was optimistic about continuing his course elsewhere. He put the blame for the situation on “the big people at the top” and asked: “Why can’t the government bail them [GSM] out? I don’t get it.”

Another student, originally from Slovakia, who has children and is “very upset” and uncertain about her prospects of completing her course, was sceptical about the tight timescale for lining up students with alternative university courses that would begin in September.

“Nobody thought GSM would close down”, given it had been open for 40 years, said another student, adding that there may have been a clue when it decided to close its huge campus in Greenford, west London.

Koua Affian, 48, said he had chosen his course because it was “designed for adults, for families”, allowing “more time to look after the kids”, and was local to him. He was doubtful that any university alternative would offer the same flexibility and convenience, or offer the same modules.

The Department for Education decided to let GSM continue accessing public student loans in November 2018, despite knowing that it had nearly collapsed into administration earlier that year – as I reported at the time. As part of that approval, the DfE approved a turnaround plan that saw Sovereign agree to the waiving of £26 million of GSM’s debt.

Mr Charles said he had started his course in June this year, shortly before GSM had its access to new loans for students withdrawn. How many other students started at GSM after November 2018, making a crucial life choice in the dark thanks to the DfE’s decision to ignore the reality of GSM’s financial situation?

None of the students I spoke with knew that GSM’s financial woes were detailed in the accounts that it published in November 2018; all of them said they would have liked to know about that at the time.

The Office for Students has since taken over the regulation of new providers from the DfE. In cross-sector regulation, OfS innovations include provision for “market exit” for failing providers. The OfS had also refused to grant GSM loan access by refusing to include it on its register of providers.

And it’s not just GSM: the OfS may be about to refuse registration and loan access to a host of for-profit providers, some of whom benefited from the Willetts era expansion, potentially leaving yet more students needing to find universities and colleges willing to help them finish their courses.

For GSM’s students, there’s uncertainty about the future: with children to provide for and without wealthy parents to bail them out, it’s highly doubtful that many would be able to start again if they cannot complete their current courses.

For the DfE ministers and officials who put the students here by fostering the publicly funded expansion of GSM, there is more certainty: it’s highly unlikely that they will be held accountable for their decisions.

John Morgan is deputy news editor at Times Higher Education

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