State turns to Pearson for help placing for-profit outcasts

Thousands of students may be stranded as colleges lose student loan access

August 28, 2014

The government has stripped a number of private colleges of the right to access public funding and has enlisted education firm Pearson to help find new institutions for students who need to transfer as a result.

Pearson, the firm that awards the sub-degree BTEC Higher National qualifications used by most of the fastest-growing for-profits, is said to have approached other private providers asking them whether they wish to offer HN courses to the students affected. The FTSE 100 company, which is paid by colleges for each HN student recruited, is said to have told providers there could be anywhere between a few hundred and 6,000 displaced students seeking new courses in London alone.

According to government figures, support for students at private colleges is projected to hit £900 million in 2014-15 – up 2,100 per cent since 2010-11. With the National Audit Office investigating the funding controls after scandals affecting some for-profits, the Department for Business, Innovation and Skills is under pressure to act.

BIS would not confirm how many or which private colleges have lost designation – the status needed for students to claim funding from the public-backed Student Loans Company.

But two of the fastest-growing private operators, St Patrick’s International College and the London School of Business and Finance, are among those yet to have received a decision from the government on funding for the coming academic year, although there is no suggestion that the colleges’ funding is at risk.

The colleges, both part of the same for-profit group, Global University Systems, are the two biggest HN student recruiters.

In just one year, 2012-13, St Patrick’s went from having no HN students with public-backed loans to more than 4,000 – giving it more SLC funding than the London School of Economics.

Established private providers such as BPP University and Regent’s University London have already been granted their designations, according to the Higher Education Funding Council for England’s website.

Tommie Anderson-Jaquest, dean of quality and standards at St Patrick’s, said: “The college currently has designation and is confident that it will be renewed.

“It has only recently responded to routine BIS requests for further information, which probably explains the delay.”

An LSBF spokesman also said it was “confident that our existing designation will be renewed”.

He added: “We have been cooperating with BIS and have responded to its routine requests for information.”

A BIS spokesman said: “Our focus is always on ensuring the highest standards for students, and we will fail providers if they do not meet these expectations.

“Some institutions have already been notified that their applications for the 2014-15 academic year have been rejected.”

He added: “No person need be without a place, so we are taking steps with Pearson to support them, should they require it.”

A Pearson spokeswoman said it had been asked by BIS “to help with a contingency plan for prospective students who are planning to start studying their chosen course this next academic year, but may not be able to do so if their chosen provider does not obtain designation”.

She added: “The designation process is ongoing, so we don’t yet know if any students will be affected.”

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Reader's comments (1)

This is an interesting development. Course designation is BIS' main tool in the regulation of private providers (although the Home Office gets to regulate those who want students who need visas). The process of designation has been beefed up to deal with private providers, with HEFCE’s role confined to processing and providing analysis of applications from alternative providers but BIS setting the criteria for designation and, referring to HEFCE’s analysis, deciding whether or not an alternative provider’s course should be designated or de-designated It's sensible for BIS to ask the awarding body to think what would happen if it didn't designate courses. As of today St Patricks and LSBF are among quite a number of providers who haven’t been designated yet. Maybe that needs to include all the students in these providers - that could easily be 6000. The course designation is a bit of a misnomer, as it's really the provider that is assessed on the basis of quality assurance; financial sustainability, management and governance; and course eligibility. So it's unlikely that individual courses wouldn't be designated (that's an interesting point - BIS decides what is an appropriate subject - so could decide on Astrology courses). So its interesting that these providers have been in touch with *BIS* providing it with 'routine' information. That implies, doesn't it, that HEFCE have not made an unequivocal recommendation in favour of designation (unless BIS is second-guessing HEFCE's role). So, maybe BIS has an interesting set of decisions to make: after all, if it were not to designate some of these providers that would put a rather large hole in the plan to expand the private sector – but to continue to provide loans to students at colleges where there are concerns about QA, finances or governance would be worse.

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