BIS cuts off loan funding to private college

The government has removed permission for private Guildhall College to access to the publicly-funded student loans system, after complaints from its students.

October 23, 2012

The Department for Business Innovation and Skills announced in a statement today that it had removed designation for courses at Guildhall College.

It is thought to be the first time a private provider has ever had designation withdrawn.

By designating individual courses at private providers, the government gives students on those courses permission to borrow from the publicly-funded Student Loans Company (SLC).

BIS said in its statement that designation had been removed from Guildhall College’s HND courses in business, and computing and systems development, the only two courses designated at the college.

No further payments will be made and BIS will “immediately start to recover payments made to date to the college”.

BIS said in its statement: “Significant numbers of students at the college contacted the SLC during the first half of September to express concerns that they were unable to start their courses on the agreed dates, and received little clear information on when they might expect to start.

“Students also reported that they appeared to be registered for a different course to the one they wished to study. The Department for Business, Innovation and Skills then undertook a joint investigation with the SLC, which has confirmed these irregularities.”

The statement added: “The Department is taking this action to protect the students and the public purse.”

BIS also said that students will retain their existing entitlements to student support if they choose to study another higher education course.

In making a statement on Guildhall College, BIS took an unusual step by making public one of its designation decisions. Critics have claimed that the designation process is far from transparent, with decisions to accept or reject private providers’ courses for funding eligibility not made public.

David Willetts, the universities and science minister, may have made the move on Guildhall College in part to show that designation can be used to regulate private providers.

The absence of a higher education bill has left the government exposed to charges that it has left private providers largely unregulated, while giving more private providers access to fast-increasing public subsidies via SLC funding.

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