Private provider student spending trebles, says BIS

David Willetts has confirmed that public spending on students at private providers trebled this year.

The universities and science minister published a written ministerial statement today on student support at private providers, following a story published by The Guardian.

Mr Willetts says: “The number of English and EU students claiming support at APs [alternative providers] has grown from 13,000 in 2011-12 to 30,000 in 2012-13, and the total public expenditure on these students has risen from £60 million to £175 million.”

The figures cited by Mr Willetts relate to maintainence grants plus the write-off cost of loans issued to the students.

He adds: “This is 4 per cent of the total student support budget. Growth has been particularly concentrated among students studying for Higher National Certificates (HNCs) and the Higher National Diplomas (HNDs).”

In 2012-13, student at private providers were granted permission to borrow up to £6,000 a year to fund their fees, a rise from the £3,375 limit in 2011-12.

The coalition has encouraged the growth of private providers, increasing the number of their courses “designated” for students to be eligible for Student Loans Company funding.

Unlike publicly-funded universities, private providers are at present allowed to recruit unlimited numbers of students with public-backed loans, leading to claims the government has allowed uncontrolled public spending.

In his statement, Mr Willetts discusses already announced plans to introduce numbers caps for private providers in 2014-15. These caps were to be based on data for colleges’ 2012-13 entry numbers.

“The Department [for Business Innovation and Skills] received this data on 5 November and concluded that some of these plans were unaffordable, given the need to control public spending,” Mr Willetts says.

“We have therefore written to the 23 APs that are expanding most rapidly to instruct them to recruit no more students for HNCs and HNDs in the current 2013-14 academic year. Degree-level courses are unaffected by these changes.”

He adds that in addition, “we identified that there had been a significant increase in the number of Bulgarian and Romanian students applying for full student support in England this year”.

Mr Willetts continues: “We have asked each of these students to supply additional information to support their applications for maintenance, before any further public funding is made available to them or to their institutions. We have asked all EU citizens applying for maintenance support in England to supply this additional information.”

The Guardian said that internal forecasts by BIS show public-backed loans for students at scores of private colleges have left an £80 million shortfall in the department’s budget this year. The deficit is forecast to soar to £330 million by 2015-16, the newspaper said.

As a result, BIS has had to propose cuts of £25 million to the Access to Learning hardship fund, which provides financial support for students, and £20 million from the higher education teaching budget in the next financial year, the report continued.

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