The government has taken emergency action to cap student numbers at private colleges as figures show that total funding at such providers nearly trebled to £0 million last year.
The Department for Business, Innovation and Skills last week brought forward its student number cap for the colleges – originally scheduled for 2014-15 – to this year after admitting that the scale of planned recruitment was “unaffordable”.
As the institutions have already recruited students for 2013-14 and their courses are under way, the retrospective cap has prompted anger in the private sector.
Figures published by the Student Loans Company on 28 November detail soaring public-backed funding at private providers, which, unlike universities, have not been subject to recruitment caps until now.
Maintenance and tuition fee loans at the providers rose from £34.4 million in 2010-11 to £77.3 million in 2011-12 and £198.7 million in 2012-13.
Meanwhile, maintenance grant awards rose to £72.8 million in 2012-13, more than trebling from £21.2 million the previous year.
When loans and grants are added up, total SLC funding at private providers rose to £1.5 million in 2012-13, up from £98.5 million in 2011-12.
Sally Hunt, the University and College Union general secretary, said: “We warned that there needed to be caps on the number of students unregulated private providers could take on, but our warnings were dismissed time after time.”
BIS has also suspended all funding for continental European Union students at private providers claiming maintenance support as part of its emergency measures, subject to their providing more information on eligibility. It has also suspended support for Bulgarian and Romanian students at public universities claiming maintenance support, and brought forward to next year a £100 million cut to the National Scholarship Programme.
A Universities UK spokeswoman said: “It is important to state that UK universities still welcome students from Romania and Bulgaria.”
BIS announced that it would bring forward the private numbers cap in a letter to institutions from Paul Williams, the department’s deputy director of student finance policy, on November.
Mr Williams says that private providers had supplied forecast student numbers to the Higher Education Funding Council for England, which would have formed the basis for setting their 2014-15 caps.
“Hefce has now shared the early results of that survey with the department and it is clear that in total the scale of planned recruitment of new students to alternative provider courses in 2013-14 is unaffordable,” writes Mr Williams.
He adds that colleges must agree to caps on their student numbers this year or they will be made ineligible for SLC funding.
Aldwyn Cooper, vice-chancellor of Regent’s University London, said he was “pretty angry about this”, saying BIS’ moves were “not something that appeared to be on the horizon”.
“There must have been a Treasury cosh brought out during this last week,” he added.
Meanwhile, it has been confirmed that MPs on the Public Accounts Committee will grill BIS on 11 December over a scathing National Audit Office report on student loans published last week, which criticises government forecasts on repayment levels.
However, BIS and SLC civil servants are the only witnesses scheduled to appear, meaning that the department’s higher education ministers – David Willetts and Vince Cable – will escape the spotlight.