UK private provider plans ‘a risk too far’, warn Hepi report authors

US, Australia show 'overly generous' rules on for-profits are dangerous, say researchers

January 5, 2017
Source: iStock

Government plans to let new private providers in England use degree powers more quickly are “high risk” and international experience shows generous rules on for-profits are “a magnet for questionable business practices”, according to the authors of a report.

A Higher Education Policy Institute report published on 5 January, Alternative Providers of Higher Education: Issues for Policymakers, examines the state of private higher education providers in England and other nations including the US and Australia.

Government plans to ease entry for private providers in England, part of the Higher Education and Research Bill, have run into strong opposition from Labour, Liberal Democrat and crossbench peers. The bill reaches its committee stage in the Lords on 9 January, with peers tabling amendments to block key elements of the plans amid fears over the potential impact on the quality of UK higher education.

The Hepi report – written by higher education consultant John Fielden and Kingston University professor of higher education Robin Middlehurst – notes that a government survey conducted in 2016 found that there were 732 private higher education institutions in England. Figures from the Higher Education Funding Council for England show that 122 private providers have courses with designation for students to access maintenance and tuition fee loans from the government-owned Student Loans Company, the report also notes.

Often, these private institutions offer a very different experience to a traditional university, with more weekend and evening teaching, flexible entry dates, limited research and undeveloped student representation, the report says.

The US has more students in private higher education than any other country, with the expansion of private, for-profit institutions such as the University of Phoenix fuelled by a need for education for adult learners and other atypical students, the study notes. While there is some evidence that US for-profit institutions have helped widen participation in higher education – a policy aim of the current UK government – they have also come under criticism for deceptive marketing practices such as failing to provide graduate employment and loan repayment data in their recruitment campaigns, the report says.

In Australia, the authors found no evidence that a growth in for-profit higher education institutions had improved quality, innovation or widening of participation. The Australian government, the report says, may have “learnt the lesson” from the US that “access to public funding for new providers needs to be more tightly controlled and monitored than was originally envisaged”.

The UK's higher education bill, the authors say, would fail to include many institutions in its regulatory framework, including institutions providing courses not eligible for SLC support. This would result in about two-thirds of current alternative providers in England going unregulated, according to the authors.

Mr Fielden said: “The Higher Education and Research Bill before Parliament is designed to give the Office for Students oversight of all English higher education, but many providers will remain outside.

“Moreover, while it removes some barriers to market entry, the new high-speed approval system for degree-awarding powers is a risk too far.”

The authors recommend that entitlement to student loans should be dependent on private providers producing good student outcomes, measured by graduate employability.

“The government’s aim of encouraging new entrants to offer healthy competition and innovative practice remain long-term targets. But they are not guaranteed to be achieved through the policies and associated legislation currently in train,” the report concludes.

“Better protection of the public purse is overdue, especially given the growth in the number of for-profit providers,” said Professor Middlehurst.

“Experience in the USA and Australia shows overly generous rules for alternative providers are a magnet for questionable business practices. The end results can include stranded students, a bill for taxpayers and regulatory intervention.”

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