French bill ‘could trigger bankruptcies’ at for-profit providers

France’s proposed crackdown on its booming for-profit higher education sector could trigger a wave of “necessary” bankruptcies and mergers if lawmakers move ahead with plans to tighten access to public funding.

Under a proposed bill set to be debated in parliament on 1 June, only institutions that receive accreditation or partnership status after an external quality review would be allowed to appear on France’s centralised admissions platform, Parcoursup.

Only these institutions will be able to award state-recognised diplomas or degrees in certain cases and get access to students who receive scholarships.

The rapid rise of for-profit higher education institutions is closely linked to the country’s 2018 apprenticeship reforms, which increased public funding for work-study programmes. Under this system, students split their time between classes and working at companies. There are now about 400,000 to 500,000 students on these courses.

“Companies love it because it’s free labour paid by the taxpayer,” said Julien Jacqmin, an associate professor at NEOMA Business School who has carried out extensive research on the industry and repeatedly warned of its lack of transparency. 

Jacqmin said although the proposal suggests using Parcoursup as a “quality entry door”, he questioned whether this alone would be enough to deter institutions from engaging in predatory practices.

He said for-profit institutions often turned to social media platforms such as TikTok to encourage students to enrol directly instead of through Parcoursup for a faster admissions process.

Jacqmin pointed out that last week lawmakers had discussed amendments that would provide more favourable apprenticeship funding conditions for institutions recruiting students through Parcoursup, which could ramp up pressure on for-profit institutions to comply with the new standards.

“The financial leverage will be a key game changer, the question of whether schools that are not on Parcasoup will still be able to access public funds,” he explained.

For example, a third of the revenue of Galileo Global Education, a large for-profit higher education provider, comes from public funds. “We’re talking close to €200 million (£170 million), so that’s a lot of public funding. If they lose 30 per cent of their revenue, they are owned by private equity groups, it’s going to be a big problem for them,” Jacqmin added.

“Many institutions will face the risk of bankruptcy,” he said, adding that there would also be waves of mergers and acquisitions. “But we need to go through bankruptcy. It needs to happen, and it will happen if the bill is passed.”

Jean Charroin, president of the Federation of Higher Education Institutions of Collective Interest, a group that represents non-profit private institutions in France, said the bill would help distinguish elite, private, non-profit schools from lower-quality commercial operators that had flourished in recent years.

“The idea is to strengthen the position of not-for-profit institutions,” he said, adding that families often struggled to differentiate between established institutions and for-profit providers, which often adopt aggressive marketing practices. 

Charroin said the legislation would create a hierarchy within the sector, separating public universities and non-profit institutions serving a “public service mission” from commercial institutions operating outside the new framework.

“Some [for-profit schools] are useful, but others are just trying to optimise, acting as free riders in this environment,” said Charroin, who is also the president of the ESSCA School of Management, a grande école.

He also criticised the current accreditation system, Qualiopi, which many apprenticeship providers already use. “This is just an administrative formality,” he said. “If you look at the figures, 99 per cent of accredited institutions renew the accreditation without any constraints.”

Charroin said restricting access to Parcoursup could help students better identify reputable institutions but warned that the reforms would only work if families were clearly informed about the risks associated with schools operating outside the platform.

“There’s a kind of asymmetry of information,” he said. “Those for-profit institutions just try to optimise their position on the market with this asymmetry.”

Charroin warned that the bill faces a narrow political window before French politics becomes dominated by budget negotiations and campaigning ahead of the 2027 presidential election. 

“If this bill is not passed before the end of September, the next window will be in 2028,” he said.

seher.asaf@timeshighereducation.com