Peace of mind: sector mulls insurance against acts of God (well, UKBA)

The sector is considering protecting its reputation among international students by creating an insurance scheme that would provide compensation or transfer to other courses for those affected if their universities fail or can no longer teach them.

November 8, 2012

The idea has gained momentum since the UK Border Agency’s decision to strip London Metropolitan University of its licence to sponsor international students, which in the immediate aftermath left thousands potentially facing the need to transfer to another institution or leave the country.

British universities are assessing whether they could copy an Australian insurance scheme that guarantees students places on new courses or refunds of their unspent tuition fees in such scenarios.

Jane Glanville, chief executive of London Higher, the umbrella body for the capital’s higher education institutions, said that members’ finance directors had been looking at whether a scheme similar to Australia’s Education Services for Overseas Students framework would be feasible in the UK.

There was only “slight” interest when the idea was first mooted in February, she said, but that changed after London Met was stripped of its licence in August. Now London Higher has organised a discussion for the end of November involving Universities UK, the Higher Education Funding Council for England, consultancy Deloitte and the sector’s mutual fund, UM Association Ltd (UMAL).

Susan Wilkinson, chief executive of UMAL, said that the London Met situation had generated “a bit of a shock wave”. The sector was waking up to the fact that if international students were stranded, it could damage the reputation of UK higher education as a whole, she added.

Overseas students at London Met initially faced deportation until a High Court decision in September won them a reprieve.

Ms Wilkinson said that the incident had shown universities how expensive it could be to relocate international students from failing institutions. “The true cost of this (is) coming to the fore,” she added.

All universities would need to voluntarily sign up to the insurance scheme, regardless of whether they felt at risk of not being able to continue teaching their international students, Ms Wilkinson said.

“If it was not something that the majority of institutions were willing to sign up for, the scheme wouldn’t be able to run,” she argued, because it would not be financially feasible if only those with “at-risk” courses joined.

In order to create a “viable scheme”, the UK sector at large rather than just universities in the capital would have to sign up, she added.

However, Ms Glanville argued that a London-based scheme could be viable and might be easier to organise “in the first instance” than one covering the UK.

A Hefce spokesman said the idea was “commendable and very timely”.

“This is about protecting the interests of students and, in so doing, maintaining the reputation of the UK as a place that welcomes and looks after its students,” he said.

A spokesman for UUK said that the revocation of London Met’s licence “has certainly given the issue of protecting international students even greater prominence than before”. He added that the body was “assessing the feasibility of introducing some form of protection scheme in the UK”.

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