Conservative peer Baroness Neville-Rolfe this week added a clause to the Consumer Rights Bill applying to students in England and Wales, after a similar amendment had been tabled by Labour.
The government said its clause was more “comprehensive” than the amendment tabled by Labour – but the opposition is likely to seek to take credit for bringing about the change.
The plan gives students at private providers in receipt of Student Loans Company funding the right to take unresolved complaints to the Office of the Independent Adjudicator for Higher Education (OIA) – thus giving them the same rights as students at publicly-funded institutions.
In addition, all students at private providers with at least one course designated for SLC funding will have access to the OIA.
Some private providers have already subscribed to the OIA, but on a voluntary basis.
The government said the aim was for the change to take effect on 1 September 2015.
The bill, currently making its way through Parliament, is scheduled to go to its report stage in the House of Lords on 19 November.
A spokesman for the Department for Business, Innovation and Skills said: “Students have always been at the heart of the government’s higher education reforms. This measure will provide equal protection to all students in higher education who receive student support, irrespective of their institution.”
Liam Byrne, the shadow universities, science and skills minister, had previously said: “It’s time to create a level playing field for universities – starting with equal rights for students in the public and private system.”
The National Union of Students and Rob Behrens, the OIA’s chief executive, had also repeatedly called for changes to ensure students at private colleges receive the same protection as those at public universities.
A BIS spokesman said the government clause was “similar to the proposed Labour amendment but there are differences”. He said that it was “more comprehensive because it covers students studying higher education at FE colleges” and “covers the qualifying students and institutions in Wales” as well as England.