New University of Canberra (UC) vice-chancellor Bill Shorten has scolded the higher education sector for not keeping up with students’ demands in a piece he penned for The Australian on Thursday.
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Sen. Bill Cassidy, R-Louisiana, spearheading the Senate plan for higher education reform.
Kevin Dietsch/Getty Images
Senate Republicans want to eliminate so-called “inflationary loans,” stop federal aid to degrees that leave students worse off and expand the Pell Grant to workforce training programs as part of a draft plan released late Tuesday evening to overhaul higher education policy.
The 71-page legislation is part of the Senate’s response to the One Big Beautiful Bill Act, which passed the House last month and is designed to fund President Donald Trump’s tax cuts, his crackdown on immigration and other top agenda items.
The Senate Health, Education, Labor and Pensions committee drafted the higher education portion of the legislation. As expected, the plan mirrors the House bill in many ways as it calls for significant changes to the federal student loan system. For instance, both plans would end the Grad Plus loans and restrict the Parent Plus program.
But the Senate has a different plan to hold colleges accountable, nixing the House’s proposed risk-sharing model, under which colleges would have to pay a fee for their graduates’ unpaid loans, for a measure like gainful employment. Under the Senate plan, colleges would have to report their average postgraduate income levels and could lose access to federal aid, depending on students’ earnings and debt. The Senate bill also omits a provision from the House bill that would exclude part-time students from the Pell grant. Overall, the changes in the Senate bill would save $300 billion over 10 years compared to the House bill, which would save $350 billion.
“American higher education has lost its purpose. Students are graduating with degrees that won’t get them a job and insurmountable debt that they can’t pay back,” said Sen. Bill Cassidy, the Republican chair of the HELP committee, in a news release. “We need to fix our broken higher education system, so it prioritizes student success and ensures Americans have the skills to compete in a 21st century economy. President Trump and Senate Republicans are focused on delivering results for American families and this bill does just that.”
Lawmakers are using the process known as reconciliation to advance the legislation, so it only needs 51 votes to pass the high chamber instead of the typical 60 votes. But before senators can vote, the Senate Budget committee and then the parliamentarian will have to scrutinize the various provisions and ensure they adhere to the reconciliation rules. For example, the policy changes must have a budgetary impact and be within the jurisdiction of the committee that proposed it.
President Donald Trump has set an ambitious July 4 deadline to sign the measure into law, which would require quick action from the Senate.
From the beginning of the Trump administration in January, House Republicans have been pushing a more radical plan with steep cuts to key welfare programs like Medicaid, the Supplemental Nutrition Assistance Program, and, most recently, student financial aid like the Pell Grant. Meanwhile, senators have talked about more modest, though still significant, spending cuts.
Now, Republicans from both chambers will have to get on the same page if they want to meet their deadline. All the while, lobbyists, policy analysts and political figures—including ex-Trump advisor, Elon Musk—are expected to come at the bill from every angle with critiques.
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When Brigitta Hunter started her teaching career, she had $20,000 in student loans and zero income – even though she was working nearly full time in the classroom.
“We lived on my husband’s pathetic little paycheck. I don’t know how we did it,” Hunter said. “And we were lucky – he had a job and my loans weren’t that bad. It can be almost impossible for some people.”
Each year, about 28,000 people in California work for free for about a year as teachers or classroom aides while they complete the requirements for their teaching credentials. That year without pay can be a dire hardship for many aspiring teachers, even deterring them from pursuing the profession.
A new bill by Assemblymember Al Muratsuchi, a Democrat from Torrance, would set aside money for school districts to pay would-be teachers while they do their student teaching service. The goal is to help alleviate the teacher shortage and attract lower-income candidates to the profession.
“Nothing makes a bigger difference in improving the quality of public education than getting highly qualified teachers in the classroom,” Muratsuchi said. “This bill helps remove some of the obstacles to that.”
To be a K-12 public school teacher in California, candidates need a bachelor’s degree and a teaching credential, typically earned after completing a one-year program combining coursework and 600 hours of classroom experience. During that time, candidates work with veteran teachers or lead their own classes.
Teacher credential programs cost between $20,000 and $40,000, depending on where a student enrolls and where they live. In 2020, about 60% of teachers borrowed money to finish their degrees, according to a recent study by the Learning Policy Institute, with loans averaging about $30,000 for a four-year bachelor’s degree and a credential program.
Entering the profession with hefty student loans can be demoralizing and stressful, the report said, adding to the challenges new teachers face. The average starting teacher salary in California is $58,000, according to the National Education Association, among the highest in the country but still hard to live on in many parts of the state. It could take a decade or more for teachers to pay off their loans.
Muratsuchi’s bill, AB 1128, passed the Assembly on Monday and now awaits a vote in the Senate. It would create a grant program for districts to pay student teachers the same amount they pay substitute teachers, which is roughly $140 a day. The overall cost would be up to $300 million a year, according to Assembly analysts, but Gov. Gavin Newsom has set aside $100 million for the program in his revised budget.
Muratsuchi has another bill related to teacher pay, also working its way through the Legislature. Assembly bill 477, which passed the Assembly this week, would raise teacher salaries across the board.
Christopher Carr, executive director of Aspire Public Schools in Los Angeles, a network of 11 charter schools, called the bill a potential “game changer.”
Teacher candidates often have to work second jobs to make ends meet, and sometimes finish with debt of $70,000 or more, he said. That can be an insurmountable barrier for people with limited resources. Paying would-be teachers would attract more people to the teaching profession, especially Black and Latino candidates, he said.
School districts around the state have been trying to diversify their teacher workforces, based on research showing that Black and Latino students tend to do better academically when they have at least one teacher of the same race.
Carr’s schools pay their teachers-in-training through grants and a partnership with a local college, which has led to more of them staying on to teach full time after they receive their credentials, he said. That has saved the schools money by reducing turnover.
“This could open doors and be a step toward racial justice,” Carr said. “California has a million spending priorities, but this will lead to better outcomes for students and ultimately save the state money.”
Tyanthony Davis, chief executive director of Inner City Education Foundation, a charter school network in Los Angeles, put it this way: “If we have well paid, qualified, happy teachers, we’ll have happier classrooms.”
Muratusuchi’s bill has no formal opposition. The California Taxpayers Association has not taken a position. The California Teachers Association, the state’s largest teachers union, is a supporter.
“This legislation comes at a critical time as we continue to face an educator recruitment and retention crisis,” said David Goldberg, the union president. “Providing new grants to compensate student teachers for important on-the-job training is a strong step forward in the right direction to strengthening public education.”
Hunter survived her student-teaching experience and went on to teach fourth grade for 34 years, retiring last year from the Mark West Union School District in Santa Rosa. The last 15 years of her career she served as a mentor to aspiring teachers. She saw first-hand the stress that would-be teachers endure as they juggle coursework, long days in the classroom and often second jobs on nights and weekends.
But paying student-teachers, she said, should only be the beginning. Novice teachers also need smaller class sizes, more support from administrators and more help with enrichment activities, such as extra staff to lead lessons in art and physical education.
“We definitely need more teachers, and paying student teachers is a good start,” Hunter said. “But there’s a lot more we can do to help them.”
This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.
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The Employment Rights Bill received its third and final reading in the House of Commons in April and is due to complete its committee stage in the House of Lords next month.
Following extensive amendments in the Commons, the current version of the Bill (at over 300 pages) is nearly twice as long as the original version published a year ago.
Although the Bill is likely to be added to the statute book in the next few months, most of the measures will not be commenced until 2026 at the earliest.
The Bill abolishes the two-year qualifying period for unfair dismissal but introduces a new framework for a lighter touch unfair dismissal regime during an “initial period of employment”. In previous government statements, this has been described as an exception for probationary periods, though it may turn out to be wider than that.
It means that employees must have started work to benefit from the day one right. Existing provisions on automatically unfair dismissals will be retained and will continue to apply from the point the employment relationship starts.
To come within this more relaxed regime during the initial period of employment, an employer will need to demonstrate a potentially fair reason for dismissal which relates to the individual employee. This means that dismissals on redundancy grounds during the initial period of employment will not fall within these new rules.
Yet to be made regulations will define the length of the initial period of employment and how it is calculated. This is understood to be a minimum of six months and could be as long as a year: currently, the government supports a compromise of nine months. Regulations may also specify that a dismissal will be regarded as fair if certain procedural steps have been followed. These might include, for example, holding a meeting with the employee before reaching a decision to dismiss and confirming the reasons for the decision in writing.
On the face of it, protecting all employees from unfair dismissal from day one will have a broadly equal impact on all employers. However, complex organisations like universities will need to invest more time reviewing their existing procedures than most other businesses. If they want to take advantage of the new “light touch” unfair dismissal regime, they will need to align their procedures on probationary periods with the new statutory framework. Again, this may not be straightforward, particularly for academic staff.
Universities have taken a lot of criticism for using zero hours contracts in certain circumstances. As of 2023–24 there are around 4,000 academics on a zero hour contract. Although we don’t have the data, it is likely that the numbers are higher for other staff.
As it stands there are three groups of measures to protect zero-hours workers:
Similar rights will be extended to agency workers via a new schedule, which was inserted in the Bill at report stage in the House of Commons. The government introduced provisions at this stage which would make it possible for employers and workers to modify the application of these provisions via a collective agreement.
Regulations will define the reference period for guaranteed hours and other conditions of entitlement, as well as the procedural requirements around the offer of a new contract. They will also specify the minimum notice period for the cancellation of shifts, the compensation due and when it must be paid.
According to the Bill’s impact assessment, the education sector as a whole has a higher-than-average user of variable hours contracts, an assessment that reflects our experience advising higher education clients. What may raise eyebrows in the sector is the potential for significant direct and indirect costs in complying with these measures, which are among the most complex in the Bill. They will need to wait for the regulations before making detailed plans, but at this stage, providers should establish which workers and agency staff are likely to be covered by these provisions.
It would also be worth exploring the possibility of entering into a collective agreement to create tailor-made arrangements to protect variable hours workers in place of the statutory regime. However, with a caution that we are still awaiting details of any restrictions on “contracting out” in this way.
The use of fixed-term contracts with fixed hours is not targeted by these measures, although there may be some anti-avoidance measures to prevent abuse. This is encouraging news for higher education institutions, which had been concerned about measures in the Workers (Predictable Terms and Conditions) Act 2023. This Act will no longer be brought into effect.
You don’t have to have read much about higher education recently to be aware that the majority of universities now have some kind of redundancy scheme in place. There are three interlocking groups of measures in the Bill concerning collective redundancies.
The rules on the numerical threshold that triggers the collective consultation requirements will be changed by introducing a new rule for multiple site redundancies. Though the threshold for single-site redundancies will stay at twenty, an alternative method of calculation will be applied when the workers involved are spread across different sites – once again, the details will be set out in regulations still to be published.
It will become automatically unfair to dismiss an employee for not agreeing to a variation to their contract, or if the employer dismisses the employee to replace or to re-engage them on varied contractual terms (so called “fire and rehire”, something which some universities have been called out for).
However, there is an exception to these rules if the employer can show the reason for the variation was to “eliminate, prevent, significantly reduce or significantly mitigate the effects of financial difficulties which, at the time of the dismissal, were affecting the employer’s ability to carry on the business as a going concern” and could not reasonably have avoided the need to make the variation.
While this new rule also applies to one-off dismissals, it is most likely to be engaged where an employer is seeking to restructure, where the obligation to consult collectively will usually apply too.
These new rules create a new category of “automatically unfair” dismissal – ie an unfair dismissal claim to which the employer will have no defence – will make it very difficult for employers to restructure without paying the employees involved significant compensation.
This is because the defence that dismissal was to mitigate “financial difficulties” is so narrowly drawn. We had been expecting amendments to this provision to be put forward in the House of Lords, but there is no sign of these so far.
The maximum period covered by a protective award for breach of collective consultation requirements will be increased from 90 to 180 days. However, proposals to introduce a new right to claim interim relief where they have been breached have been dropped.
As highly unionised organisations, universities will be acutely aware of the increased penalties for failing to comply with collective redundancy consultation. Consequently, breaches of these requirements are rare in the sector. To maintain this record employers will need to quickly get across the new rules.
Likewise, fire-and-rehire is rare (though reports are growing), but universities should be aware that the Bill’s provisions to target this practice could also be engaged when negotiating with their unions about changes to terms and conditions, if dismissal and re-engagement are being considered as a last resort.
There are other measures in the Bill relating to trade unions and industrial action, which are outside the scope of this article. These include the repeal of almost all of the last government’s trade union legislation, which is likely to take effect later this year. There is an overview of these measures in our briefing here.
The combination of good HR practices and very vocal union opposition to any breaches means that higher education providers, while far from perfect, are pretty good employers overall.
The Bill is targeted elsewhere, but with the rules changing (and likely to continue changing with subsequent legislations), employment rights compliance cannot be taken as a given and universities will need to make active efforts to stay up to date.
House Republicans on Thursday narrowly passed a massive tax and spending bill that, if signed into law, would add new financial pressures on U.S. colleges and students while extending the tax cuts instituted in 2017.
Backed by President Donald Trump and dubbed the “One Big Beautiful Bill Act,” the proposal includes provisions for dramatically increasing the endowment tax, a risk-sharing policy that would put colleges on the hook for unpaid student loans, and changes to the federal student aid program that critics say would reduce access to higher education.
It also includes work requirements to the Medicaid health insurance program, changes to which could impact university hospitals and leave many college students without health insurance.
The bill is headed to the Senate after it passed the House by one vote, with every Democrat and two Republicans voting against it. Three other Republicans either abstained or did not participate in the vote.
The Senate, held by Republicans with a 53-person majority, is widely expected to add changes to the bill.
Since lawmakers passed the legislation as part of the reconciliation process — a rule allowing the Senate to approve spending-related policies with a simple majority — Republicans can avoid a filibuster that would take 60 votes to break.
In a Wednesday letter to House leaders, American Council on Education President Ted Mitchell wrote that the higher ed policy changes would have “a historic and negative impact on the ability of current and future students to access postsecondary education, as well as on colleges and universities striving to carry out their vital educational and research missions.”
Here is a look at some of the major higher ed provisions:
Today, the richest private colleges — the few dozen with at least 500 students and at least $500,000 endowment assets per student — pay an endowment excise tax set at 1.4%.
Wednesday’s bill would implement a graduated rate structure, with levels starting at 1.4%, and rising to 7%, 14% and 21% depending on endowment assets per student. Under that tiered system, the wealthiest college would be taxed the same as the current corporate income rate.
When House Republicans advanced the endowment tax proposal earlier this month, they decried “woke, elite universities that operate more like major corporations.”
The lowest tax bracket targets colleges whose endowments are valued between $500,000 and $749,999 per student.
Excise tax tiers for private colleges based on endowment funds per student
Industry experts and insiders worry the tax could hurt colleges’ long-term missions and diminish the resources they rely on to recruit lower-income students.
In a statement Thursday, Kara Freeman, president and CEO of the National Association of College and University Business Officers, pointed to research by her organization and Commonfund finding that nearly half of endowment spending went toward student aid in fiscal 2024.
“This scholarship tax takes funds away from students and makes it less possible for colleges to support them,” Freeman said.
Endowment spending distribution by function in fiscal 2024
The bill eliminates federal subsidized loans for undergraduates and Direct Plus loans for graduate students beginning on July 1, 2026.
It also limits Parent Plus Loans, capping how much parents can borrow and only allowing them to take out loans if their dependent student has already taken out the maximum in unsubsidized loans.
The bill sets an overall lifetime student loan limit of $200,000 for any single borrower across all federal loan types.
Additionally, it raises the course hours for the full-time student designation needed to receive the maximum Pell Grant from 24 to 30 per academic year, and it changes the formula for Pell eligibility.
ACE’s Mitchell called the proposed changes to Pell Grants “crippling,” saying some 700,000 students could lose eligibility under the bill.
Regarding changes to federal student funding writ large, Mitchell described them as “deep cuts and damaging changes to important federal student aid programs” that would limit access to education.
The bill also cuts several student loan repayment programs, consolidating a “litany” of repayment plans into two, according to the House Committee on Education and Workforce.
The Republican-led committee last month described the higher education policy proposals as “strengthening accountability for students and taxpayers, streamlining student loan options, and simplifying student loan repayment.”
Along with tax hikes on some college endowments, the vast majority of colleges would make payments to the federal government based on a formula centered on the unpaid student loan balances of former students.
The risk-sharing policy is intended to increase college accountability on student costs and outcomes.
“Institutions that continue to saddle their students with debt eventually face increasing penalties and risk loss of access to federal student aid,” the House education committee said about the proposal previously.
But higher education experts and insiders worry a risk-sharing system could disincentivize colleges from accepting lower-income and historically marginalized students, who face more systemic challenges both in education and in the workforce.
While a portion of those payments might be offset by the bill’s new Promise grants for colleges that provide access to low- and middle-income students, analysis has found that many institutions will lose money overall.
ACE found that 91% of colleges serving primarily lower-income students would make significant payments to the government even after Promise grants are factored in, with a median net loss of $107,000.
“In terms of its implementation, it would be disastrous for institutions that are doing the job of bringing on students that come from communities that are already underrepresented,” Jordan Nellums, senior policy associate with The Century Foundation, a left-leaning think tank, said of the proposal in an interview this spring.
This morning I joined Amy Goodman on Democracy Now to talk about the bill that House Republican leadership worked through the night to push toward a vote on the floor.
The more Americans learn about what’s in this bill, the more outrage there will be that House members are willing to vote for cuts that will devastate communities so their billionaire donors can have a massive tax break. (That’s why they’re meeting to talk about the details in the middle of the night.)
We must sharpen our language to make clear what’s at stake in this one big, ugly, and death-dealing bill.
And we must prepare ourselves for moral action.
We are glad to announce that Indivisible, the national organization behind “No Kings Day” on June 14th, has joined our Moral Monday partners to mobilize a mass action on June 2 outside of the US Capitol. We invite you to register here if you can join us for Moral Monday on June 2.
To learn more, plan to join me and Indivisible co-founder Ezra Levin for a Substack Live on Tuesday, May 27, at 12pm ET.
I’m also looking forward to a conversation here on Substack next week with Robert Reich. We will be live Wednesday, May 28, at 5:30pm ET/2:30pm PT.
To join live conversations with us on Our Moral Moment, you just need to download the Substack app, subscribe for free, and turn out notifications. You’ll get a notice on your phone that we are going live.
Indiana state lawmakers have sent their governor a state budget bill that goes beyond setting funding levels. If Republican governor Mike Braun signs it into law, House Enrolled Act 1001 will require faculty at public colleges and universities to post their syllabi online and undergo “productivity” reviews.
The bill would also—among other things—prohibit faculty emeriti from voting in faculty governance organizations, place low-enrolled degree programs at risk of elimination by the Indiana Commission for Higher Education and end alumni elections for three Indiana University Board of Trustees seats by filling them with gubernatorial appointees. In addition, it has a provision that would let Braun remove the currently elected board members before their terms expire.
“I think overreach doesn’t begin to describe the actions of the Legislature,” said Russ Skiba, a professor emeritus of education at IU Bloomington. “This is really a sweeping takeover of higher education in Indiana.”
The Republican-controlled Indiana General Assembly passed the legislation—which runs more than 200 pages—less than two days after revealing it Wednesday, April 23. The state House approved it around 12:45 a.m. Friday, followed by the Senate’s agreement at about 1:20 a.m.
“I know a lot of legislators … simply didn’t have enough time to fully read it,” Skiba said. “There was no opportunity whatsoever for any sort of public input.”
Matt Pierce, a Democratic Indiana House member who’s a senior lecturer at IU Bloomington, said the conference committee report revealing the budget bill wasn’t even released until Wednesday evening.
“As people began to kind of go through it, they discovered all these higher education provisions that had never been discussed anywhere,” Pierce said. To have “provisions of this magnitude” pass in the budget bill “with no hearing or public input, that was pretty shocking,” he said.
The budget bill’s higher education provisions echo those passed, or at least proposed, in other red states. But Indiana’s General Assembly continues to be in the vanguard among even GOP-controlled legislatures in its fervor for regulating public higher education. Last year, state lawmakers passed, and the former governor signed, a law threatening the jobs of nontenured and tenured faculty who don’t sufficiently foster “intellectual diversity,” as defined by campus boards of trustees.
These bills follow pro-Palestine protests at IU Bloomington and tensions between faculty and university president Pamela Whitten. And with a further reduction of tenure protections looming in the new bill, a tenured professor at IU Bloomington says he’s under investigation for allegedly violating a policy the university wrote to uphold last year’s intellectual diversity law.
Ben Robinson, an associate professor of Germanic studies and a prominent pro-Palestine campus protester, told Inside Higher Ed that an anonymous student filed a complaint against him in October. The unnamed student, according to a copy of the complaint Robinson provided, wrote that Robinson “talks negatively about the state of Israel and describes the war in untrue and unfair ways” and has discussed being arrested at a pro-Palestine rally “on numerous occasions.” The student also complained that Robinson had spoken “against Indiana University on several occasions” and used class time to say the university was restricting free speech.
This complaint was filed in IU’s bias incident reporting system, which wouldn’t have involved potential discipline, Robinson said, but university administrators appeared to refile it as an intellectual diversity–related complaint under the policy passed after the General Assembly’s intellectual diversity law. He said he thinks administrators “want to overcomply on particularly this ideological issue, because that’s what they’re being told they have to enforce” by the federal government.
“How can a professor know what’s going to be called bias?” Robinson said. He also said IU Bloomington is “a campus in which the witch hunts are alive and well, and I, along with many others, have been an open target of them.”
IU spokesperson Mark Bode, in response to Inside Higher Ed’s requests for an interview and written questions about Robinson’s situation, wrote in an email simply that “IU does not comment on personnel matters.”
Multiple critics have accused IU leaders of backing one or more of the 11th-hour budget bill’s higher education changes. When asked about this, Bode provided a written statement that didn’t say whether IU was specifically involved.
“Throughout the session, Indiana University engaged with state lawmakers to shape meaningful conversations about the university’s commitments to making higher education accessible to Hoosiers and driving the state’s economy through life-changing research and innovation,” the statement said. IU “will be working over the coming weeks to understand the full impact of state legislation and ensure compliance.”
Before the bill passed, Pierce said, he texted an IU lobbyist asking the university’s position on it. The lobbyist replied that the institution didn’t have a position because it was still carefully reviewing the legislation, Pierce said.
“And right then and there I knew that IU was behind it,” Pierce said. He also questioned how lawmakers would have the “pretty esoteric” knowledge that emeritus faculty serve in some faculty governance organizations.
“You now have a convergence of the Republican attacks on higher education and the actual administration of Indiana University, and that’s a pretty shocking development,” he said.
The IU Board of Trustees currently has six gubernatorial appointees—including a student with a two-year term—plus three members elected by alumni. If Braun signs the budget bill, he and future governors will be able to appoint all nine members, the student member’s term will drop to one year and there will be no more alumni-elected members.
Braun has expressed support for this change, according to the Indiana Capital Chronicle.
“I think it’s being done because the current process [has] not maybe yielded the proper results on the entirety of how you want that important part of our state to be run—from curriculum to cost to the whole way one of our flagship universities has been operating,” Braun said, according to the Capital Chronicle. “I want to get a board there that is going to be a little more rounded, that’s going to produce better results.”
Vivian Winston, one of the elected board members, who previously announced she’s not seeking re-election, said she voted against IU president Whitten’s contract extension and the university’s post-encampment protest restrictions. But she said she doesn’t know whether her votes were related to the board change part of the legislation—which, like the other higher ed provisions in the bill, caught her “unaware.”
“I found out through the media,” Winston said of the changes in the bill.
Rodric Bray, a Republican and Indiana’s Senate president pro tem, provided Inside Higher Ed a rationale for the part of the bill ending alumni elections.
“A very small fraction of the IU alumni have been participating in the election for the alumni seats on the IU Board of Trustees,” Bray said in an emailed statement. “Of the approximately 790,000 alumni around the world, only about 2.5% of alumni voted in the most recent election for trustee. Because the number is so small, it is not a fair representation.”
But some opponents of the provision don’t see it that way. Skiba, the IU Bloomington emeritus faculty member, said, “This is clearly payback for opposition of policies favored by the president of the university and the Legislature.” He said the change would “take those voices of opposition off the Board of Trustees and essentially give complete control of the Board of Trustees over to the governor.”
Over all, Skiba said, “this Legislature is following the Trump lead—wishing to put an airtight lid on free expression. And if you’re wishing to do that, universities are an obvious place to start.”
HEPI has maintained, as one would expect, a serious interest in student housing and the impact this Bill will have on students. The last update was given on 3 February 2025, and since then, there have been significant developments. On that basis, this update covers three areas:
Long overdue work is now taking place by the Ministry of Housing, Communities and Local Government (MHCLG) to establish the mechanism whereby PBSA providers will become ‘specified’ under the Housing Act (1988). This will put them outside the remit of much of the Renters’ Rights legislation.
As part of the earlier discussions on this with the British Property Federation (and their Student Accommodation Committee), MHCLG had previously advised that existing tenancies would automatically become common law tenancies. However, on 1 April, Unipol was informed that there were problems with this and that Assured Shorthold Tenancies (ASTs) existing before the implementation of the Act will now transition to be assured tenancies that will fall under the remit of the Act.
This may seem a rather nerdy legal change with little impact, but it would be a mistake to conclude that.
The timescale of the Bill has self-evidently slipped from the initial aim of obtaining Royal Assent by Easter 2025, and the Government is racing to ensure that it passes through all its parliamentary stages by the summer recess on July 22, 2025. Some aspects of the Act will be subject to further detailed consultation, but the main tenure reforms will be implemented quickly. This rush to get the Bill through its parliamentary stages may explain the evident ‘make do and mend’ approach to the transition of PBSA tenancies. This rush certainly explains the Government’s unwillingness to accept any non-Government amendments in both the Commons and the Lords.
Because PBSA tenancies will now transition into assured tenancies, the timing of implementation is important because it will determine the extent to which the PBSA market will be disrupted by this change of position. It is reasonable to conclude that tenure changes are likely to occur around December 2025 or January 2026. Since most students living in PBSA will have already signed contracts for the 2025–26 academic year, around 402,000 students are expected to be affected, based on the Unipol/NUS Accommodation Cost Survey 2021. Only bed spaces provided directly by universities will fall outside of these transitional arrangements.
Previous AST tenants, as they become assured tenants, will:
For those students living in houses in multiple occupation (HMOs), MHCLG say that providers will be able to give notice under the new repossession ground 4a for students. This will allow repossession to take place between June and September, thus ensuring those rooms are available for new student tenants. But here, the new system is not clear because, as Baroness Taylor Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government said in the Lords on 22 April 2025:
The core aim of the Bill is to enhance the security of tenants in the private rented sector, including students. The prior notice requirement in ground 4A is key to this. If tenants are liable to be evicted through no fault of their own simply because of their student status, they must be informed of this reduced security before entering into a tenancy.
And in the case of PBSA tenants, this notice will not have been given. MHCLG say that legislative changes will be made to allow for such a notice to be given within 28 days of the implementation of the Act but, so far, there is no sign of how that will be achieved, nor was it referenced in the Lords Committee debate.
But ground 4a only applies to HMOs (roughly defined as a dwelling housing three or more students). PBSA has very few two-bed flats, but it does have 78,000 studio flats that will fall outside of ground 4a. In these cases, students can stay as long as they wish, provided they give two months’ notice of when they want to leave.
Many of those involved at the coal-face in student accommodation will know that each year there are many requests (particularly from international postgraduates who make up the majority of the market for studios) to extend their contracts from September to just before Christmas (the reasons are various, ranging from over-running dissertation time to wanting to attend the pre-Christmas degree ceremonies). These students have to be moved on in order to make way for incoming new students – now they will be able to stay. So, in the case of studios, PBSA suppliers will not be able to guarantee room availability to incoming students until the outgoing students have served notice (and they may ‘forget’ to do this anyway).
If PBSA studio tenants decide to stay on for a further year (as some do as they move from masters to research degrees), then their transitional assured tenancy status will stay with them until they choose to leave.
This added flexibility may sound great for current students, but it is very bad news for the cost and availability of accommodation for future students, particularly those looking for housing in 2026-27.
For PBSA providers, this transitional phase is an administrative and legal nightmare; they
And there are other implications:
Politicians may say ‘So what?’; this is only a transitional phase. But it is important to remember that in private sector housing, the tenant pays for everything, and so these added (and unnecessary) costs are likely to be reflected in future supply uncertainty and higher rent levels.
Furthermore, this ‘transitional phase’ goes directly against what the Government said was going to happen when Matthew Pennycook, the Minister for Housing and Planning, said to parliament (on 19 December 2024):
The Bill will exempt Purpose Built Student Accommodation (PBSA) from the assured tenancy system if the landlord is signed up to a government approved code of management practice.
No mention of a disastrous ‘transitional phase’. The shifting goalposts approach of MHCLG has significantly eroded trust among housing providers in the Government’s ability to manage the transition of PBSA to common law tenancies without further problems emerging.
Well no. Firstly, the Government could seek to mitigate the effect of the transitional phase by having a time-limited new repossession ground (say 4b) which would allow repossession for students living in PBSA studios in line with existing Ground 4a. That would, at least, maintain the academic cycle on the availability of accommodation – but perhaps they are in too much of a rush to get the Bill approved to consider this.
Secondly, the Government could seek to mitigate how many students were affected by these transitional arrangements by using powers the Secretary of State already has (under Section 8 of the Rent Act 1977 and paragraph 8 of Schedule 1 to the Housing Act 1988) to give specified status now to PBSA providers, ahead of the RRA implementation. Using those existing powers the wording in an SI could be:
The following bodies of persons (whether unincorporated or bodies corporate) are hereby specified as bodies for the purposes of paragraph 8 of Schedule 1 to the Housing Act 1988, that is to say –
any person managing or having control of purpose-built student accommodation if the accommodation let or to be let is registered with a code of practice which has been approved by the appropriate national authority under powers conferred by section 233 of the Housing Act 2004.
This would mean that as soon as that Statutory Instrument was approved (and that could be done by the end of May 2025), tenancies issued after that would then be common law tenancies and this would drastically reduce the number of tenancies in any transitional stage.
In the Lords, Baroness Taylor said the reason that Ministers were seeking additional powers to create specified status (in clause 34 of the Bill) instead of using powers they already had was:
Although there is an existing power in the Housing Act 1988 to exempt PBSA landlords, it would have required government to frequently update secondary legislation with a list of landlords, causing a duplication of work between code administrators and officials and a lag in the link between code membership and exemption status.
Even if this were true (there is no reason why the list of ‘landlords’ needs to be individually specified), this supposed ‘duplication of work’ over the transitional period would require a great deal less work to be done than that being caused by the Government’s currently disruptive and onerous proposals.
It may be unkind to conclude that after three year’s discussion with Unipol (who run the relevant Government-approved Code and the BPF) that real work by MHCLG has only just started on their own proposal and there are issues to be resolved. Even following the Minister’s statement that new powers will be granted under Clause 34 of the Housing Act, where are those new powers? There is, as yet, no evidence of any drafting of the new Statutory Instrument/s now that those are apparently needed.
This ‘dog’s dinner’ rushed approach to the PBSA transition period has still to play out fully, and more detailed work is still required to achieve implementation.
There was considerable discussion about students on 22 April 2025 in the Lords and it is worth highlighting some of the points made because they provide a clear indication of how the Government is thinking about student housing. As Baroness Taylor said in this debate:
The Government made a clear manifesto commitment to transform the experience of private renting by levelling the playing field decisively between landlords and tenants…One of the reasons the Government do not want to reintroduce fixed terms or anything like them is that they add complexity into the system. Having a simple, single system of periodic tenancies will make it easier for both parties to better understand their rights and responsibilities.
All the discussion on this Bill has been polarised into a landlord v tenant framework. This approach does not work well in addressing issues within student housing, where a third educational aspect is also relevant: the availability of good-quality housing at the right time of year, allowing students to undertake their studies in the most productive way.
Security of tenure (the central pillar of the Bill) has only limited value to a very small minority of students and this has been recognised by what might be called ‘intermediary sector bodies’ such as UUK, CUBO, ASRA and Unipol – none of which easily fall into the Bill’s landlord v tenant framework.
Lord Willetts, in proposing what would have been a useful amendment, eloquently summed up what has happened to student housing during discussions on the Bill:
I understand the arguments that the Minister makes about the need for tenants to have security and be able to put down roots in the long term, but so many of her arguments for this legislation do not apply to students who are seeking reliable accommodation for an academic year. The model that she proposes is clearly not in their interests.
The Government have clearly accepted that there is a need for some special arrangements for student lets…The Government have made some concessions to recognise the student market. There is already one exemption from the legislation, which is for purpose-built student accommodation.
There is now a second category that has been added, and that is ground 4A, which is essentially for HMOs with three bedrooms or more in the private rented sector.
But that leaves a third group for whom the Government are not currently providing any exemption. These are students in smaller accommodation, maybe one or two-bedroom properties, for whom none of the special exemptions are going to apply. It is therefore very odd that, in the Government’s model to tackle this problem, you could have three university students who are friends and are in three totally different rental regimes because of the structure of the exemptions which the Government are trying to offer.
Lord Willetts’ analysis reflects how, initially, the previous Government Bill failed to take much account of the housing needs of students and how pressure from the sector had caused some of those special needs to be recognised and accounted for in a rather grudging and piecemeal fashion.
In rejecting the amendment (which was supported by Lords from all the major parties), Baroness Taylor, on behalf of the Government said:
We have thought very carefully about the design of ground 4A. Limiting it to HMOs captures the bulk of typical students—that is, groups living in a house share. Meanwhile, students who need more security of tenure, such as single parents living with their children, postgraduate couples living together who have put down roots in an area, or families containing students, will be protected.
The core principle of the Bill is that tenants should have more security in their homes, and we think it is right that these groups should not be exposed to potential eviction using ground 4A. Self-contained one-bedroom and two-bedroom homes are also easier to let to non-students than student HMOs are, so, if a landlord cannot gain possession in line with the academic year and the tenants leave in the middle of the next one, the landlord is highly likely to be able to let the property out to non-student tenants…
What this says indirectly is that the Government accepts that between 25% and 32% (estimates vary) of off-street student housing could be lost by being occupied by non-students, as landlords let properties when they become vacant rather than fitting into the academic cycle. This loss of 138,000 beds (taking the lower estimate) will hit different University towns and cities differently, depending on their housing stock and is likely to take place over the next few years. As an earlier HEPI blog said back in June 2024,
The concern in student housing was not only about overall supply but the specific reduction of student housing supply because, if students were no different to any other tenant group and could come and go as they pleased, then why would landlords rent to students and incur void periods, when they could rent to other rental groups without having empty rooms in the context of rising overall demand for renting?
There has been no suggestion of how this lost stock could be replaced – certainly not by newly developed higher cost PBSA bed spaces which has seen net growth of only around 48,000 beds over the last three years and few of these would have been affordable and appropriate for students looking to share with a friend or partner in a lower rental bracket.
In reality, the Government has not really accepted the sector view that students are a special group and should be catered for separately. The calls for a specialist student tenancy regime have been firmly rejected. As Baroness Taylor made clear:
It would not be either right or fair for students to have less flexibility than other tenants just because of their educational status.
As my HEPI blog said back in October 2024:
It could be that the big gainers from this tenure reform are longer-term family renters and professional renters and that the poorest and most vulnerable in society together with student renters could become ‘collateral damage’. These reforms are well-intentioned by those who campaigned for them, but that does not mean all tenants will be winners from these changes.
The discussion in the Lords has now confirmed that this collateral damage for students is part of the design within the Bill. Landlords renting non-HMO properties can be reassured about their rent by simply switching their lettings to non-students – tough luck on the students, as their housing supply contracts.
My previous blog on 3 February 2025 outlined possible changes to the private providers’ Code and those have now been worked up into a revised Code. Briefly, these changes are:
Only one significant addition has been made to the revised Code and that follows the Education Minister, Janet Daly MP clarifying the positon of students withdrawing for medical reasons from their studies and the proposed four week notice period has been extended to cover ‘if the occupant has been absent from their course for more than 60 days due to illness and has agreed with their higher education (HE) provider to suspend their studies.‘
These proposals are subject to both a sector and public consultation period which is taking place across 9th April – 22nd May 2025. Details can be found online here and those interested are encouraged to respond.
The changes to the Code are designed to protect and improve students’ rights in renting PBSA but, because of the uncertainty caused by the ‘transitional arrangements’ for PBSA providers, they are going into a sector that is now increasingly hostile to the Government’s approach to them and the additional administrative and legal burdens connected with assured tenancy status that have suddenly appeared. It could well be that some responses to these Code changes will be affected by a ‘feel-bad’ factor and may be opposed by some Members.
Just two observations on the consultation. Firstly, the Code has been drafted so that the additional flexibility given to tenants to give notice on their agreement is restricted to common law tenancies, so these will not apply to transitional assured tenancies (so no ‘double-whammy’) and secondly, it is important for the PBSA sector to look beyond the immediate transitional mess and concentrate on the longer term purpose of the Code which has been a force for good, not just for student housing rights and standards, but for the sector itself, giving the student market a set of recognised value-based rules that is rarely seen in private sector renting. This demonstrates real recognition from the Code’s Members (since the Code’s inception in 2004) that students and the role of housing in education are special and need a bespoke regulatory framework.
As reflected throughout HEPI’s work, this blog approaches the issue of student housing as an educational issue and seeks to provide evidence-based observations on the student housing sector. It also seeks to offer some practical suggestions so that the possible cost and chaos in the transitional phase of the Act can be mitigated, particularly for PBSA providers.
There are still discussions to be held with MHCLG and practical issues to be resolved on how future Statutory Instruments and specified status is to be achieved. So far, although the Government say they are in ‘listening mode’ they seem not to have heard terribly well and the way in which students have been ‘accommodated’ within the Bill has been both secretive and unpredictable. It would be good if a more open relationship on future proposals could be established.
Finally, this is the first mention of the Department for Education in this blog because they appear to have had no discernible influence or input into a Bill that will both disrupt the student housing market and see some significant reduction in supply. Going back to 24 October, Education Minister Janet Daby MP stressed that the Department for Education was:
‘Working with the Ministry of Housing, Communities and Local Government to promote the importance of a strategic approach to meeting student housing needs to providers and local authorities.
Going forward, it would be good to see some, or any, evidence of that.
