Category: student protection

  • Student protection is needed in all higher-level learning

    Student protection is needed in all higher-level learning

    With the government’s white paper having a clear policy ambition and focus on higher technical (level 4 and 5) courses, and a pledge to simplify the regulatory framework for higher-level study, gaps in regulatory oversight are still exposing an increasing number of students to risk.

    The Office of the Independent Adjudicator has today published public interest case summaries, where we have named the two providers concerned, in order to highlight the impact of differing regulatory systems leaving gaps for individual students.

    The recent closure of Applied Business Academy (ABA), as detailed in my previous Wonkhe article, shows an ongoing vulnerability where students cannot seek an independent review of their awarding organisation’s actions. This is the case if they are studying for HE qualifications awarded by an Ofqual-regulated awarding organisations as these, unlike universities, are not required to be OIA members.

    While Ofqual regulates the quality and standards of qualifications, it does not oversee student protection, welfare or institutional accountability in the same way the OfS does for registered providers, even where the provider is only validating courses.

    In our experience this regulatory fragmentation leaves students vulnerable. All HE students should be afforded the same protection and recourse as well as the ability to complain about both their delivery and awarding organisation whoever their awarding body is.

    Highlighting the consequences

    In the case of ABA, when the Department for Education instructed the Student Loans Company to suspend tuition fee payments to ABA there were over 2,000 students enrolled on the Diploma in Education and Training (DET) awarded by City and Guilds or the Organisation for Tourism and Hospitality Management.  ABA also ran courses through partnerships with two universities which were not subject to any regulatory concern.

    Since ABA was registered with the OfS, all eligible students could access public student loan funding including those on the DET course. However, when ABA collapsed their route for complaint and level of redress and support was unclear and very different. The DET students lacked the institutional safety net of an OfS-regulated validator. Despite receiving positive feedback and assurance from ABA during their studies, students were told at the time of the closure that there was insufficient evidence to meet qualification requirements, leaving them with no qualification and a debt they would have to repay.

    By contrast, those on courses validated by or franchised from the University of Buckingham or Leeds Trinity University were offered a range of protections and mitigations including, various supported transfer options to localised provision with matched timetabling, transferring to the universities or identified alternative providers. They also benefitted from reimbursements for travel costs to alternative premises or were provided with free transport. Students could also access a record of achievement to support other transfer or exit, webinars and dedicated phone lines with individualised welfare support and guidance sessions. The OIA, to date, has received no complaints from students on these courses.

    Equal funding, unequal accountability?

    We have also today published a case summary about Brit College which was OfS-registered and only ran courses which were awarded by Ofqual-regulated awarding organisations, prior to its existing higher education courses being de-designated.

    Although it has not closed, it has stated on its website that where the OIA has awarded compensation or refunds, “Brit College is currently unable to meet these awards due to financial constraints” and has yet to pay our recommended compensation to any impacted student.

    The students we have received complaints from had completed all the work that had been set, and they had not been given any indication by the college during their studies that the work was not sufficient or was not at the required standard. Nine months after completing the course the college told students that they would need to undertake substantial further work. As Brit College remains open but has refused to pay compensation, it has been formally found in non-compliance with our recommendations.

    In both cases, since the awarding organisations are not within OIA membership we are unable to review any complaints from students about their acts and/or omissions in the time prior to de-designation, as we would if their courses were awarded by universities.

    When the system fails

    The fall out is not just administrative; it is deeply personal. Students are often shocked and distressed to be denied compensation, especially when we have found in their favour. They often feel confused about the lack of protection available to them and, having chosen to study at an OfS-registered provider, feel they have been misled.

    This is compounded when they hear about students at the same provider studying for different qualifications where expectations of the validators are student focused. The qualifications studied via Ofqual-regulated awarding organisations are often gateways to teaching or a technical profession. When a provider fails and there is no one to turn to, they not only lose their tuition fees and time spent studying, but also their career trajectory, and often they cannot afford to take out further loans to start again.

    In the words of one student impacted:

    I completed the DET course as required, maintaining 100% attendance, submitting all coursework and observations on time, and consistently communicating with ABA. In addition to the course fees, I spent money on travel to attend the course, further increasing the financial burden. Despite fulfilling all my responsibilities, I’ve been left without a qualification and have been unable to get a resolution for nearly two years…

    What makes this even more distressing is that I have already started repaying the loan to Student Finance from my personal income – for a course that did not result in a qualification. This feels incredibly unfair and adds to the emotional and financial pressure I am under. I am paying for something I did not receive through no fault of my own.

    Fixing the fault lines

    This is not an isolated incident – it’s a symptom of a sector under strain. With the government’s targets directly referring to higher technical qualifications, backed by the development of the Lifelong Learning Entitlement to give “equal access to student finance for higher level study,” it should now take action to ensure equal access to student protection.

    Without this, students on higher technical and other level 4/5 courses will continue to have less access to individual remedies and redress than their counterparts studying for an award from a university.

    We note that back in 2020 the DfE expected “all awarding bodies and providers which own an approved Higher Technical Qualification to join the [OIA] scheme” – yet five years on this expectation remains unmet. We have since worked with Ofqual who have confirmed that awarding organisations being in membership of the OIA Scheme is compatible with Ofqual regulation (this was also a recommendation in our recent joint report with SUMS on managing the impact of higher education provider closure).

    Without OIA membership, students unable to complain to the OIA about their awarding organisations will not have access to independent remedies and redress, unlike those studying for university-awarded qualifications.

    Most importantly, in our experience, this is not made clear to, or understood by, students when they embark on their higher education journey.

    We reiterate that this is a student protection gap that urgently needs resolving for students who deserve that same protection. All students – regardless of their awarding organisation – should have access to the same safeguards and redress. That means all awarding organisations in receipt of public money joining the OIA scheme and making student protection, and the obligation to put things right for students, a non-negotiable part of higher education policy.

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  • The network effects of a university collapse

    The network effects of a university collapse

    Universities are bound together more tightly than ministers like to admit. They share credit lines, pension schemes, suppliers, and reputations. Contagion, once started, moves faster than policy can catch it.

    The question up until recently was the wrong one: could a university fail. The grown-up question is what happens next: to students who haven’t applied yet, to local communities, and to neighbouring universities. We have to begin with the obvious: students come first.

    Failure at one institution produces contagion effects, the magnitude of which depends on regional centrality and clustering. Government should focus on keeping that transmission reproduction number (or R number – remember that from Covid?) below one. This piece maps some of those transmission channels – I’ve modelled small changes to the bottom line of an average neighbouring university, based on student spend, pensions, interest rates and group buying.

    Our patient zero – that is, the first to fall – is a provider that is OfS-registered and regionally significant, and I have estimated the price shock for its financially average neighbour. Of course, I have to assume no rescue package from government (they have signalled as such).

    The calculations below are based on the average university using 2023–24 HESA data, excluding FE colleges with HE provision. Each percentage change is illustrative rather than predictive and actual outcomes will depend on local factors.

    Stay at home

    Student demand runs on policy signals and vibes as much as price. In 2024 we saw sponsored study visas fall year-on-year and dependants drop sharply, while PGT overseas remained twitchy.

    Throw a closure into that salad and you start to see conversion eroding. Bursary spend and fee waivers will rise to keep offers attractive. A percentage point here or there looks insignificant but adds up across multiple providers.

    International students will start looking elsewhere: Australia, Canada, Germany. Or they’ll just stay at home. Better to choose a sure thing than risk having your course disrupted halfway through. Home students may be similarly spooked – but have fewer alternatives.

    There are a few antidotes: multiple guaranteed transfer corridors, decent student protection plans, and teach-out clarity. And most importantly, comms that make sense to agents and parents.

    Illustrative hits to an average university elsewhere:

    • Additional bursary spend on international: £80m × 0.5% = £400k
    • Reduced international demand: £80m × 0.5% = £400k

    Protect the USS

    Multi-employer pension schemes, like USS and LGPS, can go very squiffy when a member exits. In that case, the rules force the member to pay a large exit bill called “Section 75”, and the sums can be eye-watering. It’s a standard expectation of a “last man standing” scheme.

    Trinity College, Cambridge wrote a cheque for about £30m to leave USS in 2019. USS has suggested that, for a sample of employers (mainly Oxbridge colleges), a crystallised bill could represent anywhere from 4 to 97 per cent of their cash and long-term investment balances, averaging around 26 per cent.

    In practice, an insolvent provider wouldn’t cough up, so other universities would absorb the orphan liability. But there isn’t a mechanical “spread the S75 bill this year” formula; it would show up, if at all, via the valuation and rate-setting process. The scheme is currently in surplus, so additional contribution costs are uncertain. Of course, not all universities are enrolled in USS, but the vast majority are enrolled in multi-employer schemes.

    Illustrative hit to a USS-enrolled university elsewhere:

    • Salary base: £181m × 72% = £130m
    • USS proportion: £130m × 70% (say) = £91m
    • 1 pp rate bump: £91m × 1% = £910k

    Save livelihoods

    Universities drive jobs, rents, transport and culture. Liverpool estimates £2.2bn GVA and 26,630 jobs supported nationwide, roughly one in fifty locally. Northampton reports £823m GVA and 10,610 jobs. National estimates put the sector above £116bn.

    Remove the local provider and the GVA virtuous circle turns vicious. Cafés lose footfall, landlords lose tenants (poor them), and pubs are no longer full of students. The extent depends on how rooted the provider is in its community.

    Government will find itself paying anyway. Either pre-emptively with small civic grants to keep key services alive, or retrospectively with bigger cheques after the rot sets in. Maybe it will finally put a stop to town and gown tensions.

    Illustrative hit to an average university elsewhere:

    • No direct cost to other universities
    • Material GDP and tax impacts for government
    • Likely need for community grants.

    Flatten the yield curve

    Lenders rarely treat a closure as an isolated blip; being hawkish, they would probably reprice the entire university category.

    Add 50 basis points to a £90m facility and you’ve created a recurring £450k drag until you refinance. All in all, that’s not a huge bite out of your cash flow, but it will certainly make you more cautious.

    To fix this, listen to your finance directors: stagger your maturities and fix your rates well in advance. Or, radical thought – stop yanking at your credit lines and make do with what you have.

    Illustrative hit to an average university elsewhere:

    • Additional interest costs: £90m × 0.50% = £450k

    Herd immunity

    Group buying is one of the few places with cash on the table. In 2023–24, the UK Universities Procurement Consortia (UKUPC) members put about £2.4bn through frameworks and reported roughly £116.1m (4.84%) in cashable savings. The Southern Universities Procurement Consortium (SUPC) talks about £575m of member spend and average levy rebates of around £30,000 per full member.

    If fewer universities use those routes, frameworks lose clout, and with that, discounts and rebates. The more volume that stays in the collective pot, the better the prices – but for critical services, it’s still wise to have a backup supplier in case one fails.

    Another group issue is shared services. Up until recently, they were seen as a poisoned chalice, but are now growing out of necessity. The usual worries are well-rehearsed: loss of control, infighting and VAT jitters. Still, some experiments, like Janet and UCAS, have been tremendously successful, although pricing relies on throughput.

    Shared IT, payroll, procurement or estates often come with joint and several obligations. If one partner hits trouble, you start to see real governance friction.

    The practical fixes are contractual. Ringfence any arrears so they do not spill onto everyone else, and rebalance charges on a published, defensible formula.

    Illustrative hit to an average university elsewhere:

    • Frameworked spend: £131m (total non-staff) × 60% (frameworked, say) x 4.84% (cashable savings) x 10% (diminution) = £380k.
    • Shared services: impossible to quantify.

    What ministers can do without a podium

    I’ve modelled small changes to the bottom line (again, illustratively) – in this example one university going under could cost others £2.5m, or 50 per cent of the average university’s 2023–24 surplus. This number isn’t rigorous or comprehensive, but serves as an interesting thought experiment.

    The rational response is a resolution regime that protects students and research, temporary liquidity for solvent neighbours, clear transfer routes when the worst happens, and deployment of short, targeted grants for civic programmes.

    A single collapse could probably be absorbed; a string of them could set off an irreversible domino effect with far-reaching consequences. Ministers need to plan for this now – or else risk a very hefty civic bailout.

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  • Student protection through market exit is not a compliance exercise

    Student protection through market exit is not a compliance exercise

    As financial and regulatory pressures on higher education intensify, the once-hypothetical risk of a large-scale provider exiting the market is becoming increasingly likely.

    For government, regulators, providers, and students alike, the implications are far-reaching – and the sector needs to be better prepared.

    The risk is growing

    Following our previous reflections on this issue we received many messages of interest and support for doing some further work in this area. We also felt there was an opportunity to bring together the experiences of colleagues we have worked with on closures and mergers, and to capture the perspectives of receiving providers and learn from their experiences.

    SUMS Consulting reached out to us, offering to support a new project on a pro bono basis. Their expertise in supporting student services and change management, combined with the OIA’s experience of student complaints during provider exits, created a unique opportunity to look at the problem from both a practical and student-centred perspective. We also asked the Committee of University Chairs (CUC) to join the project’s steering group, ensuring governance perspectives were built into the work from the outset.

    The risks we highlighted last year have only intensified for students. At the OIA we have seen further complaints from students at smaller providers which have closed in recent months. In these scenarios we see staff working quickly to try to support students at both closing and receiving providers, but there is little legal scaffolding to protect students caught in these situations often leaving them with limited redress.

    Lessons from experience

    Whilst we recognise that there has been significant positive engagement, discussion and reports in this space, the SUMS and OIA report – Putting Students First – Managing the impact of higher education provider closure – focuses on mitigating the impact on students and specifically learning from the closures and cases the OIA has been involved in. If we don’t take these examples seriously, we risk missing a crucial opportunity to improve outcomes for students.

    Over the course of the project, there has been increasing discussion about these policy issues and a ‘playbook’ for market exit is frequently suggested. Whilst neither the SUMS nor the OIA has the expertise or role to produce something quite this detailed and comprehensive, SUMS have gathered insights from university leaders, students’ unions, experts, and those who have dealt directly with closures.

    Part one of our report provides the context for the study and collates findings on lessons and effective practice for the sector derived from all the research and information gathering for this study. SUMS also provide some conclusions on the gaps identified by the research and make a series of recommendations for Government, regulators and sector bodies and providers to consider to better support providers navigate exit and help mitigate the impact of future closures on students.

    Part two is a separately appended framework (in MS Excel format), which is a summary of the key lessons learnt from the study. The framework is not intended as a comprehensive guide for good institutional governance or achieving financial sustainability. Rather it is intended to provide a checklist of key actions that might be taken by providers to mitigate the risk of exit and, if exit is unavoidable, to help prepare for a managed exit.

    Several consistent themes emerged across our discussions – notably the practical disconnects between the current legal, regulatory, financial, and student protection processes. What’s clear is the value of early engagement – acting early and being transparent can reduce the impact on students – but we recognise this is difficult when reputational and commercial pressures are in play. Also it is apparent that receiving providers and students’ unions often play a vital role but aren’t always given the resources or support they need.

    We found that student protection is too often treated as a compliance task. If the sector is to avoid repeating past mistakes, this mindset must change.

    Moving the conversation forward

    This report is not the final word. We see it as a starting point — a resource that will grow over time, as more providers engage with it and share their own experiences. We hope that going forward the framework will continue to evolve – helping shape a more student-centred response. We also hope it will support other initiatives in this space, such as the forthcoming updates to the CUC Governance Code.

    Above all, we want to encourage providers, governors, and policymakers to engage in open and honest conversations about the risk of market exit — before it becomes an emergency. Used early, the framework can help institutions strengthen their preparedness, build resilience, and ultimately safeguard the student experience.

    What happens next?

    We encourage providers and others to review the framework and checklist with leadership and governance teams, integrate its guidance into risk and student protection planning, share feedback to help develop the next iteration of the work.

    We hope that this work will help enable honest and open conversations about exit, both within and between providers. We all need to understand that student protection isn’t just a compliance issue – it has a very direct impact on the experiences of students in the system, and we must all be ready.

    Ultimately, we need a more collaborative whole sector approach – because when a large-scale provider exits the market suddenly, the impact isn’t isolated – it becomes a sector-wide challenge. Ensuring students are protected must be a shared sector priority.

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