Tag: DfE

  • Thirty ways for DfE to deliver the manifesto and raise the standards of teaching

    Thirty ways for DfE to deliver the manifesto and raise the standards of teaching

    At some point we might get some actual higher education policy out of the Department for Education (DfE), rather then endless crackdowns on the “long tail” of the market.

    There’s rumours of a (next) TEF delay which we might assume ministers will take an interest in, and a signature manifesto commitment on “raising the standards of teaching” to deliver.

    It all raises the question – what should Labour’s agenda on teaching be? How might it realise it? What levers will it pull?

    Of course it’s the case that whatever the agenda, there’s a need for the right funding systems (for both students and providers) and regulatory architecture – and those will always dominate the discussion.

    But you’d like to think there were other things, too.

    Reinstate the QAA as the Designated Quality Body for England

    A nice and easy start – DfE should issue ministerial guidance directing the Office for Students (OfS) to re-designate the QAA as the primary quality assurance body. The QAA has long maintained international credibility and alignment with European standards – something England has steadily drifted away from since Brexit.

    It’s not just a technical concern – it threatens the international recognition of English qualifications at precisely the moment when global educational mobility is increasing. OfS has tried to go it alone on quality – the experiment has failed. No shame in admitting it.

    Re-establish periodic review and enhancement expectations

    DfE should direct OfS to develop requirements for periodic review through regulatory guidance, with funding for QAA to develop a new enhancement framework appropriate for England’s context.

    One of the quietest casualties of England’s regulatory experiment has been the loss of enhancement culture. Where periodic review encouraged reflection and improvement, the pendulum has swung decisively toward compliance and risk-management. England now lags behind Scotland, Wales, and Northern Ireland, where enhancement remains central to quality regimes. We now have a sector where teaching innovation happens despite, not because of, the regulatory framework. It could be different.

    Scrap the current TEF and implement subject-level TEF based solely on metrics

    First, abolish continuation as a metric that somehow represents “teaching quality”. We’re so good at it internationally that it’s starting to look like kidnapping, and seriously harms the sort of flexibility envisaged in the LLE or required from our breathtaking levels of decision regret.

    Then DfE should issue guidance to OfS to develop a revised, metrics-based TEF framework operating at subject level. As currently constituted, the TEF neither drives genuine improvement nor provides meaningful information to prospective students. A subject-level TEF grounded in robust metrics would offer more granular insights while slashing the cost and reducing the burden of institutional storytelling that has become the hallmark of the current approach.

    And it would prevent what is likely to be a key “misleading practice” issue under the DMCC act – a “TEF Gold” banner appearing over the door of a faculty whose metrics would suggest a requires improvement rating.

    Regulation for the struggling, enhancement for the thriving

    A simple distinction should be made in the approach to quality. For provision failing to meet minimum standards (below B3 thresholds), robust regulatory intervention through OfS remains appropriate. More boots on the ground if anything. However, for provision meeting or exceeding these standards, we need to shift from compliance-checking to enhancement-driven approaches led by the QAA.

    In other words, let OfS carry on its inspections against minimums when its thresholds aren’t met at subject, provider or subcontractual status level, and let quality assurance and enhancement via the QAA sit alongside it for everyone and everything else. Neat.

    Require publication of external examiner reports

    External examining is one of the oldest, most trusted mechanisms for maintaining academic standards in the UK and causing collaboration between universities – but it has become increasingly invisible. Reports are buried in back-office systems, rarely seen by students, and seldom discussed publicly.

    DfE should ask OfS to require the publication of external examiner reports, ideally with departmental responses. Visibility would encourage honest, critical engagement with standards, and bring students into the conversation about academic quality. After all, if someone outside the course is checking the quality, why shouldn’t those taking it see what they say?

    Establish targets and metrics for staff teaching training

    Universities are packed with subject experts, but expertise in a field doesn’t automatically translate to expertise in teaching it. The uneven distribution of pedagogical training and teaching qualifications means students experience wildly different teaching quality depending on their course, their institution, and sometimes just luck of the draw.

    OfS should be asked to introduce and publish metrics on staff development, making it clear which institutions invest in teaching capacity. Yes – an input measure! One that students actually want.

    Require compulsory module evaluations with visible results for loan-funded modules

    Every module of credit that accrues a loan charge should be accompanied by a compulsory evaluation, with results that students can see – including action taken in response to previous feedback. A “comply-or-explain” expectation would transform the granularity of information available to students making module choices under the Lifelong Loan Entitlement, and improve teaching. DfE should ask OfS to apply one.

    If students are paying for it (and increasingly borrowing for it), they deserve to know what they’re getting. Student reps can then work with the data and work with departments on problem-solving instead of being asked to supply feedback themselves.

    Reduce the number of subject benchmark statements

    The current proliferation of subject benchmark statements has created a rigid and prescriptive framework that stifles innovation and interdisciplinarity. If they were reduced and broadened, there would be more space for flexible curriculum design that responds to emerging fields and changing student needs. That’s about defining quality and standards in ways that encourage creativity and adaptation – rather than compliance and conformity. The EU is hurtling in this direction anyway – would be nice to… align at least. That should go in the ministerial direction letter too.

    Convene a partnership between NUS and SUs for national student-led teaching awards

    Student-led teaching awards have become an important feature at most universities, celebrating innovative and impactful teaching practice. But their impact remains localised, with limited opportunities to identify and share learning across the sector.

    A national event via a DfE-convened partnership would elevate the student voice in defining teaching excellence, create powerful incentives for innovation, be a good PR opportunity for the sector and the department, and offer a rich source of data on what works for students. It could even be held in 20 Great Smith St to drive down the cost.

    Direct OfS to mine NSS free text responses for insights

    The quantitative metrics of the National Student Survey tell only part of the story, and OfS is sat on a couple of decades of hidden intel – free text comments contain rich insights into student experiences that are currently underutilised.

    With appropriate anonymisation and ethical safeguards, comments could identify emerging concerns, highlight innovative practice, and provide a more nuanced understanding on good teaching that numbers alone cannot capture. Another one for the letter.

    Establish a clear definition of learning gain

    Despite extensive discussion about “learning gain,” there’s no clear consensus on how to define, measure, or evaluate it. The ambiguity undermines meaningful comparison and improvement – so establishing a clear, shared definition, focused not just on knowledge acquisition but on skill development, mindset shifts, and capability building means we’ll get a meaningful framework for universities to then further define for assessing educational value and building degree transcripts. “Dear Susan and Edward, we expect…”

    Establish a regulatory domain focused on “learning environment”

    Currently, various aspects of the learning environment – mental health support, physical spaces, digital infrastructure, library resources – are regulated through bafflingly disconnected processes. The fragmentation creates bureaucratic burden – despite this stuff being essential underpinners of good teaching and learning.

    Asking OfS to establish “learning environment” as a distinct integrated regulatory domain (like it is in most other countries in Europe) would mean a rounded approach – recognising how these elements interact to shape student experiences and outcomes, and clocking that a lot of good learning is self-directed. It would also allow for more proportionate, context-sensitive regulation while maintaining a focus on student needs and concerns.

    Establish a TASO equivalent for teaching enhancement

    England needs its own equivalent to Scotland’s Quality Enhancement Framework – a body akin to TASO (Transforming Access and Student Outcomes) that can convene national conversations, fund pilots, and broker communities of practice around teaching improvement.

    Maybe QAA gets to do it, maybe Advance HE. Maybe someone else. But it’s needed nationally, probably at subject level, and should involve students drawn from academic societies. Can’t DfE convene something? It should CETL for nothing less.

    Push for associate membership of European University Alliances

    Brexit has left UK higher education increasingly isolated from European teaching networks, particularly the European Universities Initiative. They are building the future of cross-border education – shared degrees, joint quality standards, collaborative innovation – while England watches from the sidelines. DfE should push for associate membership of these initiatives to ensure English universities (and their student leaders) are plugged into the networks where the most exciting teaching innovations are emerging.

    Implement DfE approval for franchising arrangements based on qualitative criteria

    DfE should establish a dedicated unit with oversight powers for franchising approvals, with clear guidance on acceptable quality thresholds – as friends in FE somewhere in Great Smith St do. The proliferation of “business/cities” subcontracted provision has created regulatory blind spots where quality can quietly deteriorate – so DfE should hold approval rights for these arrangements based on demonstrable need, track record and quality assurance, not just market opportunity.

    Apply the OfS fairness condition universally across the sector

    DfE should instruct OfS to implement its proposed new fairness condition without exemptions through clear ministerial guidance, requiring equal application regardless of provider type or history. If we’re not careful, we’ll focus regulatory attention on newer providers while established institutions escape scrutiny.

    If a student at Oxford experiences the same poor practice as one at a small private provider, shouldn’t they have the same protections? Fairness cannot be conditional based on institutional prestige or history – either students have rights to good teaching, or they don’t. They do.

    Establish university-level ombuds and a duty to learn from complaints

    DfE should fund a pilot programme for university-level ombuds, followed by regulatory requirements through OfS. The duty to learn from complaints would be implemented through revised regulatory conditions requiring public reporting of complaint outcomes and resulting changes. University-level ombuds – independent officers with investigatory powers and public reporting requirements – could transform how institutions respond to student concerns.

    Rather than treating complaints as irritants to be managed, they would become valuable sources of insight for improvement. OfS should also establish a duty for universities to publicly report on what they’ve learned from complaints and appeals (both uphelds and others), and how practice has changed as a result.

    Require OfS to respond to the National Student Survey each year

    DfE should issue ministerial guidance requiring OfS to produce an annual NSS response document with clear action points – identifying trends, highlighting innovative approaches, and using the data to inform regulatory priorities. Students take the time to respond to the NSS. It’s time the regulator did too. As if students score assessment and feedback badly every year and nothing is done!

    Strengthening student rights and voice

    For all the rhetoric about students as partners, their voice in institutional decision-making remains precarious. The regulatory framework mentions consultation more than it meaningfully embeds representation. Many still treat student engagement as a box-ticking exercise rather than a fundamental right.

    OfS should be told to enshrine stronger rights for students to influence decisions, the curriculum, know their rights, seek redress, and access minimum support for their representative bodies. And every provider should be required to support effective independent student organising (ie SUs) and support for students – not as an optional extra, but as a core expectation given students’ textbook vulnerability.

    Establish “access to the loan book” criteria to drive credit transfer

    England’s student finance system remains one of the major obstacles to student mobility. If you switch institutions, change course, or build credits in non-traditional settings like the workplace, transferring that credit remains difficult and under-rewarded.

    Tying access to student loan funding to a provider’s willingness to recognise credit means DfE could incentivise the sector towards a more flexible future where students have genuine mobility between institutions and learning contexts. Yeah, I know Oxford and Cambridge and a slice of the Russell Group would object. They can probably afford to go exempt.

    Task OfS with monitoring subject/module availability and facilitating collaboration

    The regulator should be asked to monitor subject and module availability – not just full course provision – and be given a duty to drive collaboration across the sector where gaps emerge. Medr has by its minister already. When competition constricts provision, regulation must enable collaboration.

    This might mean funding shared provision between institutions, brokering inter-university module access, or investing in digital platforms that let students study beyond the borders of their enrolled provider. Quality needs choice, and choice has to be protected in the architecture of the system.

    Enshrine the right to build credit across multiple institutions

    What if we enshrined the right for students to accrue credit across multiple higher education institutions? And a domestic mobility scheme – akin to Erasmus, but within the UK – could support students spending terms or modules at other universities, either physically or virtually, learning lessons about excellent teaching along the way. Jacqui would have to have a conversation with Heidi Alexander over the train fares, but it would be great – and we’ve seen it work in several European countries now.

    Allow students to accrue credit through employment and service learning

    Not all “teaching” is done by “teachers”. All students – undergraduate and postgraduate – should have the right to accrue up to 10 ECTS credits per year in recognised learning outside their main subject area, via employment or service learning. For postgraduates, this could extend to 15 ECTS. Whether working in a hospital, mentoring in a school, or delivering a community project, students should gain formal credit for skills developed through real-world application.

    That would reframe how we think about employability – not just as abstract skills development, but as validation of the meaningful, real-world work many students already juggle alongside their studies. It would also encourage universities to connect more deeply with their communities, valuing not just what students learn in the university, but what they contribute through it. The LLE should really be focussed on delivering flexibility in what’s there now, not spending hours figuring out how to stop fraud over single modules.

    Require credit-bearing student induction and transition support

    Every institution should be told to offer structured, credit-bearing induction and transition support – developing core competencies in academic integrity, independent study, and navigating support systems – to ensure that all students, regardless of their educational background, have the tools they need to succeed.

    And while graduate attributes are mapped in fine detail, the early-stage student journey is largely ignored. An embedded framework that builds progressively – with assessment points and optional modules on civic leadership, digital fluency, and self-directed learning – would connect coherently to broader goals around credit mobility and skills development.

    Introduce credit-bearing interdisciplinary “civic lab” modules

    DfE should establish a dedicated civic engagement fund with partners in DCMS to support development and implementation, alongside regulatory expectations for civic engagement through the curriculum. Credit-bearing, interdisciplinary “civic lab” modules across all degree programmes would allow students to apply their disciplinary knowledge to real-world problems while developing transferable skills.

    Develop competency-based academic transcripts

    Revisit Burgess and announce the end of the UK degree classification system. It’s harmful twaddle. A competency-based academic transcript would provide a more helpful picture of graduate capabilities, detailing specific skills, contributions, and attributes developed through their studies.

    It would offer employers and postgraduate admissions tutors a more granular view of student achievement, and would encourage universities to think more broadly about the skills and attributes they’re developing through their teaching. The degree should be about what’s interesting about that graduate, not whether they’re in one of four impossibly broad categories. Just announce it. See what happens.

    Embed inquiry-based learning into teaching quality expectations

    DfE should direct OfS and QAA to develop clear guidance on inquiry-based approaches in teaching, backed by targeted enhancement funding for curriculum development and staff training.

    At its heart, that’s about moving beyond compliance-driven education to something more transformative. We should embed inquiry-based learning into teaching quality expectations, requiring that all students, in all disciplines, experience modules built around active investigation rather than passive content delivery. Module evaluations should track the extent to which learning creates independence, reflection, and curiosity – not just satisfaction scores.

    Communicate NSS standards to students from the outset

    Currently, the National Student Survey functions primarily as a retrospective judgment tool – students reflect on their experiences only after they’ve happened. But the questions within the NSS implicitly define standards for good teaching, assessment, and support.

    If these were made explicit from the outset, students could work collaboratively with academics throughout their courses to realise these standards, rather than just offering critiques after the fact. Doing so would transform the NSS from a retrospective satisfaction measure to a developmental framework that drives ongoing improvement through partnership between students and staff, and empower students to articulate their expectations clearly and engage in constructive dialogue throughout their studies. Pop it in the letter.

    Extend the National Student Survey to postgraduate students

    The experiences of postgraduate students remain considerably less visible than those of undergraduates. Yet these students make up a significant proportion of the higher education population and face distinct challenges around supervision, research support, and career development.

    Extending the NSS to postgraduate taught and research students – with questions appropriately tailored to their contexts – would shine a light on these experiences and drive improvement in areas that are currently under-scrutinised.

    Implement an all-applicant entry survey via UCAS

    Universities currently receive minimal information about their incoming cohorts’ learning needs, preferences, and educational backgrounds – and without that, how can the teaching ever be excellent? It makes it difficult to tailor provision effectively or identify potential support needs early. A universal entry survey, administered through UCAS, would provide invaluable data on learning styles, academic concerns, skills gaps, and support requirements.

    With appropriate data protection safeguards, this information could be shared with providers to inform course planning, induction programmes, and support services. It would also allow for more personalised approaches to teaching and learning, so students receive the support they need from day one rather than waiting for problems to emerge.

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  • DfE and OfS are running out of road on regulating a “free market” effectively

    DfE and OfS are running out of road on regulating a “free market” effectively

    On The Wonkhe Show, Public First’s Jonathan Simons offers up a critique of the way the higher education sector has been organised in recent years.

    He says that despite being more pro-market than most, he’s increasingly come to the view that the sector needs greater stewardship.

    He says that the theory of change embedded in the Higher Education and Research Act 2017 – that we should have more providers, and that greater choice and contestability and composition will raise standards – has worked in some instances.

    But he adds that it is now “reasonably clear” that the deleterious side effects of it, particularly at a time of fiscal stringency, are “now not worth a candle”:

    If we as a sector don’t start to take action on this, then the risk is that somebody who is less informed, just makes a judgment? And at the stroke of a ministerial pen, we have no franchising, or we have a profit cap, or we have student number controls. Like that is a really, really bad outcome here, but that is also the outcome we are hurtling towards, because at some point government is going to say we don’t like this and we’re just going to stop it overnight.

    Some critiques of marketisation are really just critiques of massification – and some assume that we don’t have to worry about whether students actually want to study something at all. I don’t think those are helpful.

    But it does seem to be true that the dominant civil service mindset defaults to regulated markets with light stewardship as the only way to organise things.

    Civil servants often assume that new regulatory mechanisms and contractual models can be fine-tuned to deliver better outcomes over time. But the constant tweaking of market structures leads to instability and policy churn – and bad actors nip around the complexity.

    Much of Simons’ critique was about the Sunday Times and the franchising scandal. But meanwhile, across the sector, something else is happening.

    Another one

    Underneath daily announcements on redundancies, senior managers and governing bodies are increasingly turning to data analytics firms to inform their academic portfolios.

    The advice is relatively consistent – close courses with low market share and poor demand projections, maintain and grow those showing high share or significant growth potential.

    But when every university independently follows that supposedly rational strategy, there’s a risk of stumbling into a classic economic trap – a prisoner’s dilemma where individual optimisation leads to collective failure.

    The prisoner’s dilemma, a staple of economic game theory, runs like this. Two prisoners, unable to communicate, have to decide whether to cooperate with each other or defect. Each makes the decision that seems best for their individual circumstance – but the outcome is worse for both than if they had cooperated.

    I witnessed it unfold a couple of weeks ago. On a Zoom call, I watched four SU officers (under the Chatham House rule, obvs) from the same region simultaneously share that their university was planning to expand their computer science provision while quietly admitting they were “reviewing the viability” of their modern languages departments.

    It did sound like, on probing, that their universities were all responding to the same market intelligence, provided by the same consultancies, using the same metrics.

    Each university, acting independently and rationally to maximise its own market position, makes decisions that seem optimal when viewed in isolation. Close the underperforming philosophy department. Expand the business school. Withdraw from modern languages. Double down on computer science.

    But when every university follows the same market-share playbook, the collective result risks the sector becoming a monoculture, with some subjects vanishing from entire regions or parts of the tariff tables – despite their broader societal value.

    The implications of coordination failure aren’t just theoretical – they are reshaping the physical and intellectual geography of education in real time.

    Let’s imagine three post-92 universities in the North East and Yorkshire each offered degrees in East Asian languages, all with modest enrolment. Each institution, following market share analysis, determines that the subject falls below their viability threshold of 40 students per cohort. Acting independently, all three close their departments, creating a subject desert that now forces students in the region to relocate hundreds of miles to pursue their interest.

    The spatial mismatch of Hotelling’s Location Model means students having to travel further or relocate entirely – disproportionately affecting those from lower-income backgrounds.

    And once a subject disappears from a region, bringing it back becomes extraordinarily difficult. Unlike a coffee shop that can quickly return to a high street when demand reappears, universities face significant barriers to re-entry. The sunk costs of hiring specialist staff, establishing facilities, securing accreditation, and rebuilding reputation create path dependencies that lock in those decisions for generations.

    The Matthew effect and blind spots

    Market-driven restructuring doesn’t affect all providers equally. Higher education in the UK operates as a form of monopolistic competition, with stratified tiers of universities differentiated by reputation, research intensity, and selectivity.

    The Matthew effect – where advantages accumulate to those already advantaged – means that elite universities with strong brands and secure finances can maintain niche subjects even with smaller cohorts.

    Meanwhile universities lower in the prestige hierarchy – often serving more diverse and less privileged student populations – find themselves disproportionately pressured to cut anything deemed financially marginal.

    Elite concentration means higher-ranking universities are likely to become regional monopolists in certain subjects – reducing accessibility for students who can’t meet their entry requirements.

    Are we really comfortable with a system where studying philosophy becomes the preserve of those with the highest A-level results, while those with more modest prior attainment are funnelled exclusively toward subjects deemed to have immediate market value?

    Markets are remarkable mechanisms for allocating resources efficiently in many contexts. But higher education generates significant positive externalities – benefits that extend beyond the individual student to society at large. Knowledge spillovers, regional economic development, civic engagement, and cultural enrichment represent value that market signals alone fail to capture.

    Market failure is especially acute for subjects with high social utility but lower immediate market demand. Philosophy develops critical thinking capabilities essential for a functioning democracy. Modern languages facilitate international cooperation. Area studies provide crucial cultural competence for diplomacy and global business. And so on.

    When market share becomes a dominant decision criterion, broader societal benefits remain invisible on the balance sheet. The market doesn’t price in what we collectively lose when the last medieval history department in a region closes, or when the study of non-European languages becomes accessible only to those in London and Oxbridge.

    And market analysis often assumes static demand curves – failing to account for latent demand – students who might have applied had a subject remained available in their region.

    Demand for higher education isn’t exogenous – it’s endogenously shaped by availability itself. You can’t desire what you don’t know exists. Hence the huge growth in franchised Business Degrees pushed by domestic agents.

    Collective irrationality

    What’s rational for an individual university becomes irrational for the system as a whole. Demand and share advice makes perfect sense for a single institution seeking to optimise its portfolio. But when universally applied, it creates what economists call aggregate coordination failure – local optimisations generating system-wide inefficiencies.

    The long-term consequences extend beyond subject availability. Regional labour markets may face skill shortages in key areas. Cultural and intellectual diversity diminishes. Social mobility narrows as subject access becomes increasingly determined by prior academic advantage. The public good function of universities – to serve society broadly, not just commercially viable market segments – erodes.

    But the consequences of market-driven strategies extend beyond immediate subject availability. If we look at long-term societal impacts, we end up with a diminished talent pool in crucial but less popular fields – from rare languages to theoretical physics – creating intellectual gaps that can take generations to refill.

    An innovative economy – which thrives on unexpected connections between diverse knowledge domains – suffers when some disciplines disappear from regions or become accessible only to the most privileged students.

    Imagine your small but vibrant Slavic studies department closes following the kind of market share analysis I’ve explained – you lose not just courses but cross-disciplinary collaborations that generate innovative research projects. Your political science colleagues suddenly lacked crucial language expertise during the Ukraine crisis. Your business school’s Eastern European initiatives withered. A national “Languages and Security” project will boot you out as a partner.

    Universities don’t compete on price but on quality, reputation, and differentiation. It creates a market structure where elite institutions can maintain prestige by offering subjects regardless of immediate profitability, while less prestigious universities face intense pressure to focus only on high-demand areas.

    In the past decade, some cross-subsidy and assumptions that the Russell Group wouldn’t expand disproportionately helped. But efficiency has done what efficiency always does.

    Both of the assumptions are now gone – the RG returning to the sort of home student numbers it was forced to take when the mutant algorithm inflated A-Levels in 2020.

    Efficiency in market terms – optimising resources to meet measurable demand – conflicts directly with EDI and A&P goals like fair access and diverse provision. A system that efficiently “produces” large numbers of business graduates in large urban areas while eliminating classics, philosophy, and modern languages might satisfy immediate market metrics while failing dramatically at broader social missions.

    And that’s all made harder when, to save money, providers are reducing elective and pathway choice rather than enhancing it.

    Choice and voice

    When we visited Maynooth University last year we found structures that allow students to “combine subjects across arts and sciences to meet the challenges of tomorrow.” It responds to what we know about Gen Z demands for interdisciplinary opportunities and application – and allows research-active academics to exist where demands for full, “headline” degrees in their field are low.

    In Latvia recently, the minister demanded, and will now create the conditions to require, that all students be able to accrue some credit in different subjects in different institutions – partly facilitated by a kind of domestic Erasmus (responding in part to a concern about the emigration caused by actual Erasmus).

    Over in Denmark, one university structures its degrees around broad disciplinary areas rather than narrowly defined subjects. Roskilde maintains intellectual diversity while achieving operational efficiency – interdisciplinary foundation years, project-based learning that integrates multiple disciplines, and a streamlined portfolio of just five undergraduate degrees.

    As one student said when we were there:

    The professors teaching the classes at other universities feel a need to make their little modules this or that, practical or applied as well as grounded in theory. Here they don’t have that pressure.

    And if it’s true that we’re trapped in a reductive binary between lumbering, statist public services on the one hand, and lean, mean private innovative operators on the other, the false dichotomy paralyses our ability to imagine alternative approaches.

    As I note here, in the Netherlands there’s an alternative via its “(semi)public sector” framework, which integrates public interest accountability with institutional autonomy. Dutch universities operate with clear governance standards that empower stakeholders, mandate transparency, enforce quality improvement, and cap senior staff pay – all while receiving substantial public investment. It recognises that universities are neither purely market actors nor government departments, but entities with distinct public service obligations.

    When Belgian student services operate through distinct governance routes with direct student engagement, or when Norwegian student welfare is delivered through regional cooperative organisations, we see alternatives to both market competition and centralised planning.

    They suggest that universities could maintain subject diversity and geographical access not through either unfettered market choice or central planning mandates, but through governance structures that systematically integrate the voices of students, staff, and regional stakeholders into portfolio decisions. The prisoner’s dilemma is solved not by altering individual incentives alone, but by fundamentally reimagining how decisions are made.

    Other alternatives include better-targeted funding initiatives for strategically important subjects regardless of market demand, proper cross-institutional collaboration where universities collectively maintain subject breadth, regulatory frameworks that actually incentivise (rather than just warn against extremes in removing) geographical distribution of specialist provision, new metrics for university performance beyond enrolment and immediate graduate employment and better information for prospective students about long-term career pathways and societal value when multiple subject areas are on the degree transcript.

    Another game to play

    Game theory suggests that communication, coordination, and changing the incentive structure can transform the outcome.

    First, we need policy interventions that incentivise the public good nature of higher education, rather than just demand minimums in it. Strategic funding for subjects – and crucially, minor pathways or modules – that are deemed nationally important, regardless of their current market demand, can maintain intellectual infrastructure. Incentives for regional subject provision might ensure geographical diversity.

    Universities will need to stop using CMA as an excuse, and develop cooperative rather than competitive strategies. Regional consortia planning, subject-sharing agreements, and collaborative provision models are in the public interest, and will maintain breadth while allowing individual institutions to develop distinctive strengths.

    Flexible pathways, shared core skills, interdisciplinary integration – all may prove more resilient against market pressures than narrowly defined single-subject degrees. They allow universities to maintain intellectual diversity while achieving operational efficiency. And they’re what Gen Z say they want. Some countries’ equivalents of QAA subject benchmarking statements have 10, or 15, with no less choice of pathways across and within them. In the UK we somehow maintain 59.

    At the sector level, collaborative governance structures that overcome the coordination failure means resource-sharing for smaller subjects, and student mobility within and between regions even for those we might consider as “commuter students”.

    OfS’ regulatory framework could be reformed to incentivise and reward collaboration rather than focusing primarily on institutional competition and financial sustainability. Funding could reintroduce targeted support for strategically important subjects, informed by decent mapping of subject (at module level) deserts and cold spots.

    Most importantly, universities’ governing instruments should be reformed to explicitly recognise their status as “(semi)public sector bodies” with obligations beyond institutional self-interest – redefining success not as market share growth but as contributing to an accessible, diverse, and high-quality higher education system that serves both individual aspirations and collective needs.

    Almost every scandal other than free speech – from VC pay to gifts inducements, from franchising fraud to campus closures, from grade inflation to international agents – is arguably one of the Simons’ deleterious side effects, which are collectively rapidly starting to look overwhelming. Even free speech is said by those who think there’s a problem to be caused by “pandering” to student consumers.

    Universities survive because they serve purposes beyond market demands. They preserve and transmit knowledge across generations, challenge orthodoxies, generate unanticipated innovations, and prepare citizens for futures we can’t yet imagine.

    If they respond solely to market signals, the is risk losing what makes them distinctive and valuable. That requires bravery – seeing beyond the apparent rationality of individual market optimisation to recognise the collective value of a diverse, accessible, and geographically distributed higher education sector.

    It doesn’t mean running provision that students don’t want to study – but it does mean actively promoting valuable subjects to them if they matter, the government intervening to signal that quality can (and does) exist outside of the Russell Group, and it means structuring degrees such that some subjects and specialisms can be studied as components if not the title on the transcript.

    It also very much requires civil servants and their ministers to wean themselves off the dominant orthodoxy of regulated markets as being the best or only way to do stuff.

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  • DfE steps in to require franchise partners to register with OfS

    DfE steps in to require franchise partners to register with OfS

    The Department for Education is consulting on a requirement for providers delivering courses under a franchise model to register with the Office for Students in order that they and their students can access student finance. We also get an impact assessment and an equalities assessment.

    The consultation defines “franchise” as follows:

    A ‘franchised student’ is one who is registered with a lead provider, but where more than 50% of their provision is taught by a delivery partner

    The proposals suggest that should a provider delivering teaching as part of a franchise arrangement (a delivery partner) have over 300 (headcount) higher education students in a given year it would need to be fully registered with the Office for Students under the existing Approved or Approved (Fee Cap) rules. A failure to register would mean that the institution could not access fee loans, and that students could not access maintenance loans.

    There would be some exceptions: providers already regulated elsewhere (schools, FE colleges, NHS trusts, local authorities, and Police and Crime Commissioners) would be exempt. Providers (not courses) would be designated (by DfE) as being eligible to access student finance, meaning that providers running courses regulated by a Professional Statutory Regulatory Body (PSRB) would not be exempt.

    The consultation (which closes 4 April 2025) will inform regulation from April 2026 onwards, with the first decisions about designation made in September 2027 (based on 2026-27 student data) for the 2028-29 academic year. Once up and running this pattern will continue: providers will be designated (based on student numbers from the previous academic year) for the academic year starting the year after. This gives newly designated providers a year to register with OfS.

    Student numbers would not be allowed to breach the 300 threshold without registration – the expectation is that providers should register the year before this happens. Should the threshold be breached, the provider will lose a year of eligibility for student finance for new students: the upshot being that if an unregistered provider had 300 or more students in 2026-27 and then registered with OfS, it would lose a year of designation (so would not be able to access student finance in 2029-30).

    In November of each year, DfE intends to publish a list of designated providers for the following academic year – providing a point of reference for applicants looking to access finance. Interestingly, despite the requirement being to register with OfS it is intended that DfE runs the process: making decisions about eligibility, managing appeals, and communicating decisions.

    The background

    We’ve been covering some of the issues presented by a subset of franchise providers on Wonkhe for quite a while, and it is now generally accepted that higher education in the UK has a problem with the quality and ethics at the bottom end of such provision. Students either enrol purely to access student finance, or are duped (often by higher education agents rather than providers themselves) into accessing fee and maintenance loans for substandard provision. Continuation and completion rates are very low compared to traditional providers, and the qualification awarded at the end (despite bearing the name of a well-known university) may not open the career doors that students may hope.

    We knew that an announcement on this issue was supposed to be coming in January via the government’s response to the former Public Accounts Committee’s report on franchising, which was sparked by a National Audit Office (NAO) report on the issue from a year ago – so the announcement today has just squeaked in under the Treasury’s wire.

    There is a slightly longer backstory to all of this – and we’re not referring to the various bits of coverage on potential abuses in the system that we’ve run in recent years. It was back in 2023 when the Department for Education’s heavily belated response to the Augar review reached a conclusion – promising to “drive up” the of franchised provision, in part by promising to:

    …closely consider whether we should take action to impose additional controls, in particular regarding the delivery of franchised provision by organisations that are not directly regulated by any regulatory body.

    Given the NAO and the PAC’s interventions since, and the work of the OfS in addressing franchise (and other academic partnership failings) via the coming round of quality (B3) investigations, special investigations, and enhanced data gathering, it is perhaps a little surprising that it is DfE that is in the lead here.

    There’s an important lesson in that to be drawn at some stage – the repeated pattern seems to be that an issue is raised, the sector is asked to self-regulate, it seemingly can’t, the regulator is asked to step in instead, and then it is discovered that what we actually need is secondary legislation.

    How big a deal is franchising

    Despite a number of years trying, OfS has never managed to compile full data on the extent of franchised, validated, and other partnership provision – the details are not in any current public dataset. It’s important here to distinguish between:

    • Franchised provision: where a student is registered at one institution, but teaching is delivered at another
    • Validated provision: where a student is both registered and taught at one institution, but receives an award validated by another institution on successful completion of their course
    • Other academic partnerships: which include arrangements where students are taught by more than one institution, or where existing providers partner to allow students to apply to a “new” provider (like a medical or veterinary science school)

    Of the three, it is just franchised provision that is in the scope of this new DfE requirement. It’s also (helpful) the most easily visible of the three if you are a fan of mucking about with Unistats data (though note that not all courses are in the unistats release, and the other vagaries of our least-known public data release continue to apply).

    DfE has done a bang-up job in pulling together some statistics on the scale of franchise provision within the impact assessment. We learn that (as of 2022–23 – usual student numbers caveats for that year of data apply):

    • There were currently 96 lead providers, franchising to 341 partners, of which 237 were unregistered.
    • 135,850 students were studying via a franchise arrangement – some 80,045 were studying at unregistered providers (a proportional fall, but a numerical rise, over previous years)
    • These students tended to study business and management courses – and were more likely to be mature students, from deprived areas, and to have non-traditional (or no) entry qualifications.
    • An astonishing 92 per cent of classroom based foundation years delivered as an intercalated part of a first degree were delivered via franchise arrangements.
    • There were 39 franchise providers teaching 300 students or more – of which four would be subject to the DfE’s proposed exemptions because of their legal status. These providers accounted for 66,540 students in 2022–23.

    A note on OfS registration

    Office for Students registration is confusing at the best of times. Though the registration route is currently paused until August 2025, providers have the choice of registering under one of two categories:

    • Approved (fee cap) providers are eligible to access fee loan finance up to the higher limit if they have an approved access and participation plan, receive direct funding from OfS, and access Research England funding.
    • Approved providers can access fee loan finance up to the “basic” fee limit. They are not eligible for OfS or Research England funding – but can directly charge students fees that exceed the “basic” fee limit.

    In the very early stages of developing the OfS regulatory framework it was briefly suggested that OfS would also offer a “Basic” level of registration, which would confer no benefits and would merely indicate that a provider was known to the OfS. This was speedily abandoned, with the rationale being that it would suggest OfS was vouching in some way for provision it did not regulate.

    The long and painful gestation of the Lifelong Learning Entitlement (LLE) also yielded suggestions of a third category of registration, which would apply to providers that currently offer provision backed by the Advanced Learner Loans (ALLs) that would be replaced by the LLE. We were expecting the Office for Students to consult on this new category, but nothing has yet appeared – and it does feel unlikely that anyone (other than possibly Jo Johnson) would be keen on a riskier registration category for less known providers that offers less regulatory oversight.

    Statutory nuts and bolts

    The proposal is to lay secondary legislation to amend the Education (Student Support) Regulations 2011 – specifically the bit that is used to designate types of courses for student finance eligibility. There is currently a specific section in this SI – section 5 part 1 subsection d, to be precise – that permits registered providers to franchise the delivery of courses to partners.

    The plan appears to be to amend this section to include the stipulation that were more than 300 higher education students (in total, excluding apprenticeships) are taught at a given franchise provider (I assume in total, across all franchise arrangements) then it must be registered with the Office for Students in order to be designated for student finance (allowing students to receive maintenance loans or providers to receive fee loan income).

    This might seem like a small technical change but the implications are surprisingly far reaching – for the first time, the OfS (as regulator and owner of the register) has the ability to decide who can and cannot deliver UK higher education. If anyone – even a well established university – is removed from the OfS register it will be unable to access fee loans (and students will be unable to access maintenance loans) for intakes above 300 students, even if it enters into a partnership with another provider.

    Let’s say, for example, that a large university becomes financially unsustainable and thus breaches the conditions of registration D1 or D2. Under such circumstances it could no longer be registered with OfS and thus would no longer be able to award degrees. The hope would be that student interests would be protected with the support of another university, and one way that this could happen is that someone else validates the awards offered to students so they can be taught out (assuming temporary financial support is forthcoming from government or elsewhere). Under the new rules, this arrangement would only work for 300 students.

    What might go wrong

    OfS has classically regulated based on the registered student population – the implication being that providers involved in franchise provision would be responsible for the quality and standards of teaching their students experience wherever they were taught. There have been indications via the B3 and TEF dashboards that students studying at franchise partners tend to have a worse experience overall.

    This does pose the question as to whether franchise partners who registered with OfS would now be responsible for these students directly, or whether there will be some sense of joint responsibility.

    There’s also the question of how providers will respond. Those franchised-to providers who either worry about their own outcomes (no longer judged within a larger university’s provision) wouldn’t cut it might stay that way – an outcomes based system that is always playing catch up on experience could see some poor provision linger around for many years. On the other hand, if they are now to be subject directly to conditions like those concerning transparency, finances and governance, they might as well switch to validation rather than franchising, which will change the relationship with the main provider.

    We might in aggregate see that as a positive – but that then raises the question as to whether OfS itself will be any better at spotting issues than universities have previously been. They could, of course, not fancy the scrutiny at all, and disappear with a rapidity that few student protection plans are designed to withstand.

    It’s also worth asking not just about OfS’ capacity or regulatory design, but its powers. Many of the issues we’ve identified (and that have been called out by the NAO and the PAC) concern how the courses are sold – OfS’ record on consumer rights is at best weak, and completely untested when the profit incentives are so high.

    And even if the sunlight of better outcomes data puts pressure on over outcomes, we do have to worry about how some of the providers in this space get there. In at least one of the providers that we have seen an OfS report for, a call centre team in another country that is supposed to offer support to students sounds more like a debt collection agency, chasing students up to submit, with academic staff paid partly on outcomes performance. Remember, providers that do this are already registered with OfS – so clearly the registration process itself is not enough to weed out such practices.

    The impact assessment is very clear that it expects some (an oddly precise four in the first year and two in subsequent years) unregistered franchise partners to drop out of HE provision altogether rather than applying for registration. The unspoken codicil to this is that everyone hopes that this will be the poor quality or otherwise suspect ones – but many excellent independent providers (including a number of Independent HE members) have struggled to get through a lengthy and often bureaucratic process, even before registration was temporarily closed because OfS decided it didn’t have capacity to run it this year.

    The line between supporting students and spoon feeding them is often debated in HE, but we might worry that a decent dose of it in a way that few would think appropriate could enable providers to evade regulation for some time – especially if validation (and therefore less risk to the validator) becomes the norm.

    And naturally, this is an approach that ignores two other things: whether a demand-led system at the edges should respond to the sort of demand that seems to come from those profiting from selling more than it does from students themselves, and whether it’s right. Even if you accept some for-profit activity, for anyone to be arranging for predominantly low-income and disadvantaged students to be getting into full tuition fees debt when sometimes more than half is kept in profits, and what is spent seems to include high “acquisition” costs and quite low delivery and support costs.

    In other words, one of the tests should be “does any of this change the incentives,” and it’s not at all clear that it does.

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  • Universities want more money upfront. DfE wants proof students are really there

    Universities want more money upfront. DfE wants proof students are really there

    When students get their student maintenance loans, they get the first instalment a lot earlier than their university gets the corresponding tuition fee payment.

    That might help explain the curious case of disparities between pulldown – but there’s a sound theory to it. Students without savings could face a cashflow issue if it was any other way.

    It’s becoming a problem for universities too. The Office for Students’ (OfS) financial sustainability update report highlights low liquidity levels in the sector – especially during certain points in the annual cycle.

    That matters because universities have to meet minimum liquidity requirements in the registration conditions in England. A failure to maintain those levels can also impact “going concern” status and breach some lending covenants.

    In the past, cash flow imbalances tended to be offset by other income sources, borrowing, or cross-subsidies, such as from international student fees.

    But given how universities operate and the demands on cash before those SLC payments come in, there is in some providers a disproportionate reliance on arrears payments from SLC-funded students compared to other funding sources.

    For non-SLC funded students, universities typically charge fees upfront (or at least in front-loaded advance instalments) or get payments for stuff like government-funded apprenticeships monthly. Research funding streams also match payments to incurred costs.

    But the SLC’s payment profile for undergrads is 25:25:50 – so universities face significant upfront costs in the first two terms and then wait longer than standard 30-day payment terms to receive funds, forcing them to bridge the gap using other resources.

    So the University Alliance has a proposal – switch those payments to 40:40:20 to improve the sector’s funding position:

    Even if the move was phased first to 33:33:33 and then to 40:40:20 it would have an immediate impact on the current situation which has been adversely impacted by the previous administration’s approach to international student recruitment through restrictive visa policies.

    The current system is going to have to undergo change anyway, given the potential implications of the LLE. I note in passing that one of the most common student leader manifesto goals this year is better, less front-loaded instalments – surely the principle (and the issue in terms of cashflow) cuts both ways.

    But UA’s proposal might not land in quite the way intended – partly because the Student Loans Company is under pressure to increase yield.

    Leakage

    DfE’s “Tailored Review” of the Student Loans Company back in July 2019 talked of the rapidly increasing size of the student loan book, and the increasing importance and value of having a robust, well-resourced and effective repayment strategy which actively seeks to maximise yield.

    That said that the SLC is hamstrung by IT systems which do not “adequately facilitate the use of smart diagnostics for effective modelling, proactive use of data analytics and more precise customer segmentation” to minimise repayment leakage:

    Indeed, unverified customers account for c. £7bn of uncollected repayments (although many of these would not be in a position to repay)

    September’s SLC board minutes noted that its CEO had been along to DfE’s Audit and Risk Committee, where the department led an item on the student finance loan book, with an emphasis on its “scale and yield potential”.

    And its newly published Business Plan for 2024-25 says it will work with partners in DfE to progress proposals to “improve repayment customer verification rates”, “improve data quality to increase verification and yield” and look at options to apply stronger sanctions to customers not adhering to the terms and conditions of their student finance repayments.

    Some of that is about the SLC’s systems – but one of the problems noted in the National Audit Office’s report into franchising is that there is often “insufficient evidence” that students are attending and engaging with their courses:

    In determining a student’s eligibility for loan payments, and before making payments, SLC uses lead providers’ data to confirm students’ attendance. Lead providers self-assure their own data… there is no effective standard against which to measure student engagement, which attendance helps demonstrate, and there is no legal or generally accepted definition of attendance. Providers themselves determine whether students are meaningfully engaged with their course.

    So in a set of circumstances where the NAO and the Public Accounts Committee (PAC) are already worried about attendance and engagement, and providers are worried about their own cashflow, it seems unlikely that DfE is going to be receptive of a proposal to give providers more of the money early – especially if, in the case of franchised provision, it can’t just claw it back from the lead provider if there’s a problem like the Applied Business Academy.

    As we noted back in October, the government’s response to the NAO and the PAC was that it published guidance on attendance management in May, against which providers can be held to account “in relation to the release of SLC tuition fee payments”.

    That said that there is an “understanding and acceptance” across the sector that providers should have in place published attendance and engagement policies, so that students understand the commitment expected of them and the respective process a provider follows if attendance expectations are not met.

    It also said that in any circumstance where a provider does not have a published policy, the department “expects” that one will exist from the 2024-25 academic year – but it’s pretty clear talking to people around the country that that goal hasn’t been meaningfully met in large parts of the sector, at least in terms of a policy that both covers home students and is “auditable”.

    And part of the difficulty there is what is or isn’t meant by “attendance”.

    Attending isn’t always in person

    The Attendance Management guidance says:

    Attendance means participation in a course by a student, including, but not limited to, teaching face-to-face or blended study, in line with a provider’s published attendance policy. A provider should communicate its policy to a student and have an auditable process in place to support the action it may take when a student does not meet attendance expectations.

    It goes on to say that providers have flexibility to ensure every student engages with a course, and that the student and/or the course may require greater or less attendance than another due to circumstances or content.

    SLC told me that there is no difference between “attendance” and “engagement” – the definition of “attendance” for student finance purposes is active and ongoing engagement. Crucially, it said that “attendance” doesn’t have to mean “in person”, or “studying on campus”.

    But the conflation of “attendance” and “engagement” doesn’t seem to apply when a course is designed and designated. Noting that “blended learning” combines traditional classroom teaching with online learning and independent study, it says that there has been some confusion as to whether these courses should be coded as distance learning courses:

    Courses of any teaching method are distance learning if the students only attend occasionally, for example once a term. If students attend regularly, for example once a week, and follow a structured timetable, the course is not distance learning and you should not add it to CMS as such.

    That paragraph draws a clear distinction between attendance and engagement. Its two scenarios also appear to draw a distinction between (physical) attendance and “engagement”:

    • Scenario 1: Thomas is studying a BA Hons in sports coaching. His course hours are 30 weeks online study including lectures and tutorials, 2 days per week physical attendance at sports academy, 6 days per year attendance at university. As Thomas needs to attend the sports academy regularly rather than occasionally, this is an in-attendance course.
    • Scenario 2: Kate is studying an HND in Musical Theatre. Her course hours are 30 weeks online study including lectures and tutorials, 3 days per year (1 day per term) attendance at college. As Kate only needs to attend college occasionally rather than regularly, this is a distance learning course.

    The difference between Scenario 2 and the patterns of attendance being seen by many providers around the country this term is that in that scenario, the course is designed not to include regular physical attendance.

    A two-stage process

    SLC told me that whether it’s distance or in-person, engagement on a course is required and confirmation of that engagement is therefore required for SLC to make a fee loan payment on the student’s behalf.

    Ongoing engagement is not part of the definition of in-person or distance learning. That distinction relates to the attributes of the course that is supplied by the provider, as to whether the course has elements of in-person learning or if the student is not required to be in-person.

    But the obvious question is as follows. Notwithstanding codified exemptions for disabled students, if a course is designed as blended, would an acceptable “attendance management” policy for a course of that sort allow a student to engage all term, but only occasionally physically attend?

    If yes, and Kate’s HND wasn’t designed as blended, and her mate Kathy was on a course that was designed as blended, that would seem to mean that they could both have exactly the same attendance and engagement pattern, but Kathy would get a maintenance loan while Kate wouldn’t.

    If, on the other hand, a course was designed as blended and requiring regular in-person attendance, and SLC would expect an attendance/engagement policy to enforce that regular in-person attendance, there’s plenty of providers right now falling foul of those expectations.

    So you end up with three categories:

    1. Providers who’ve never really had a proper policy on any of this for home students – let alone enforce one – beyond noticing if a student doesn’t submit what can often be end-of-year summative assessment.
    2. Providers who designed a course as blended where students are in reality engaging in a “distance learning” kind of way – which, while confirming engagement in accordance with the rules, seems hugely unjust to tens of thousands of OU students if nothing else.
    3. Providers who are heavily auditing and requiring physical attendance – partly to achieve parity with international students – at just the point that students are struggling to attend in-person given wider demands on their time.

    It may well be the case that SLC is stuck with the definitions it has – which in part date back to the Teaching and Higher Education Act 1998.

    But if it’s the case that it’s OK for an attendance policy to not actually require regular in-person attendance, it’s hard to believe that whatever size and shaped-problem that DfE and the SLC have with student loan fraud is going to get anything other than worse.

    And in the end, this all comes back to an old problem – not knowing what’s going on underneath headline non-continuation.

    How far in?

    Remember those risks that OfS identified in its insight brief on subcontracting:

    • Data of extremely poor quality has been submitted in relation to students at some subcontractual partnerships, leading to payments being made to, and on behalf of, students who are not genuinely entitled to them.
    • Delivery partners have lacked clear attendance policies, making it almost impossible for lead providers to submit accurate data to the OfS and the SLC in relation to these students.
    • Students have been encouraged to register for courses that they do not genuinely intend to study, to access public funding through maintenance loans. In some cases, students have withdrawn from courses shortly after receiving these funds; in others there are grounds to doubt that they are continuing to study, despite their termly attendance being confirmed.

    Whether we’re looking at a select group of partnerships as OfS published data on last week or directly taught provision, while we know what percentage of UG students don’t make it to the second year, we don’t know what proportion:

    • Got instalment 1 of the maintenance loan but didn’t get as far as “engaging” enough for the provider to claim instalment 1 of the tuition fee loan (they don’t show up at all in non-continuation)
    • Engaged enough to enable the provider to claim instalment 1 but not enough to enable the provider to claim instalment 2 (and what proportion of them claimed maintenance instalment 2)
    • Engaged enough to enable the provider to claim instalment 2 but not enough to enable the provider to claim instalment 3 (and what proportion of them claimed maintenance instalment 3)
    • Engaged enough to enable the provider to claim instalment 3 but then failed and was withdrawn
    • Engaged enough to enable the provider to claim instalment 3 and was eligible to progress but then self-withdrew
    • And we don’t know any of the above for subsequent years of study.

    In many ways, what we have here is (yet) another iteration of the stretch involved in a single level playing field. There have been endless tales down the years of Russell Group alumni not really “engaging” at all for entire years, and in some cases entire degree courses – only to pull it out of the bag at the end. It’s an adult environment, after all.

    On the other hand, with another part of the sector now under close scrutiny over ghost students of differing definitions – just as the FE sector saw scandals over in the 90s – it doesn’t feel like that kind of legend is to be allowed.

    In terms of the cashflow thing, if DfE and the SLC are going to push more of the money upfront, they’re surely going to want to know the percentages and numbers in each of the above categories.

    And the accuracy of those percentages and numbers involves providers being sure about “enough” engagement – in an auditable way across the diversity of programmes and reasonable adjustments – to tick the box in the data return to SLC three times a year.

    It does feel like there’s some distance to go on all of that as it stands.

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  • DfE gets over £13.5billion extra for 2020/21 loan impairments

    DfE gets over £13.5billion extra for 2020/21 loan impairments

    The UK government published its “supplementary estimates” for 2020/21 yesterday. These allocate additional budgetary resources to departments.

    Education has been given an extra £13.531 billion to cover the estimated losses on student loans issued in the year (April 2020-March 2021) and the likely downwards revisions to the value of already existing loans. The department had an original allowance of roughly £4billion, but was determined by the last comprehensive spending review and had not been revised since Theresa May’s decision to increase the loan repayment threshold in 2017.

    Last year, an additional £12billion was granted and most was used. (These allocations are not additional cash, but the formal recognition that the cash issued in the form of loans is going to generate much lower returns than originally anticipated).

    The estimated non-repayment on new loans was thought to be in the region of 55%. That is, for every £ loaned, the treasury expected the equivalent of c. 45p in return: in 2019/20, £17.6billion of new loans were issued, but only around £8billion in net present value is projected to be repaid. (Note that this percentage figure – “the RAB” – is often confused with a measure of how many borrowers ultimately clear their loan balances, i.e. those who repay the equivalent of 100p or more).

    When the new higher fees came in, the loss on loans was projected to be in the region of 30p in the £. That is, 70p would be repaid. A raft of policy changes and modelling errors along with the impact of austerity on graduate earnings has dramatically increased the costs; recent accounting changes have meant that those costs now show up in the headline figures that count. (The loan scheme was never designed to be self-financing, but no one set out to develop a scheme with this current level of subsidy. The £4billion in the original budget for 2020/21 reflects the much earlier aim of “incentivising” the department responsible for loans to get the estimated non-repayment closer to 30-35%).

    The pandemic has made things a lot worse for earnings and livelihoods. But the HE sector has in recent months also been positioned to take a hit when the chancellor looks to review spending in the Autumn. The obvious place to look is initial outlay and so I would expect to a clamp down on undergraduate fee levels (without any offsetting increase in tuition grant).


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  • DfE committed to £200m of contracts for loan sale that’s not proceeding

    DfE committed to £200m of contracts for loan sale that’s not proceeding

    Page 221 of the Department for Education’s 2019/20 financial statement contains the note reproduced above.

    The sale programme for “pre-2012” student loans was cancelled in March. But DfE looks like it will be paying out over £30million per year for the next few years to financiers anyway. Total liabilities are booked above at over £220million.


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