England’s for-profit higher education market could be set to hot up, with the New College of the Humanities looking for investment of up to £8.5 million and BPP University potentially set for new ownership.
On 19 August, it was announced that for-profit online specialist Arden University had been sold to Global University Systems, a company registered in the Netherlands, adding to its significant grouping of private higher education providers in England, including the University of Law, St Patrick’s and the London School of Business and Finance.
And further investment could be coming to some other major for-profit players, which the government will hope steps up competition for universities.
NCH, a subsidiary of for-profit Tertiary Education Services, has pitched to prospective investors looking for capital of up to £8.5 million.
It is thought that the investment is being sought to allow NCH to grow further, and that potential investors have been told that bigger profits are forecast in future.
NCH, set up by A. C. Grayling, charges home and European Union students fees of £12,000 a year.
In 2014, the institution sought investment of £10 million.
But since then, NCH has secured permission for students to access funding from the public-backed Student Loans Company and to recruit non-EU students, who pay higher fees of £19,750. Both developments could be attractive to investors as offering grounds for growth in student numbers.
It is not clear whether or not the new investment would result in a change of ownership for NCH.
Rob Farquharson, NCH chief operating officer, said: “We’re currently reviewing different investors and options, and look towards successfully concluding this investment round in the near to medium-term future.”
Meanwhile, US-based Apollo Education Group, the owner of BPP and the University of Phoenix, is in the process of being sold to a consortium of investors led by US private equity firm Apollo Global Management.
But the deal is being held up as the US Department of Education decides whether to give its approval, which is required for the sale to be finalised.
The sale has a big potential impact on the US higher education sector given the size of Phoenix.
One of the investors involved in the bid alongside Apollo Global Management, Vistria Group, was co-founded by a long-time family friend of the Obamas, and its chief operating officer is a former deputy secretary in the Department of Education – meaning that approval of the sale is a delicate political issue for the Obama administration.
With the issue of free higher education having been a key battleground between Hillary Clinton and Bernie Sanders in the fight for the Democratic presidential nomination, there are also suggestions that the Obama administration may not want to make a decision relating to for-profit higher education during the presidential campaign.
In the sale of Arden by Capella Education Company to GUS, a price of £11.5 million has been reported, but this has not been confirmed by either of the parties in the deal.
Arden has institutional designation – meaning that it does not have to seek permission on a course-by-course basis to recruit students with SLC funding.
That gives it access to potentially unlimited numbers of new students with public loan funding.