Investigation into student loans issued to those studying at franchised higher education providers

Public Accounts Committee Closed Inquiry
Opened: 10 Jan 2024 Closed: 29 May 2024 Parliament page
Higher education providers can create partnerships, or ‘franchises’, with other institutions to provide courses on their behalf. These franchised providers are not required to register with the Office for Students (OfS), which regulates higher education. Lead providers keep responsibility for teaching quality and protecting students’ interests. In 2022 and 2023, … Read more
9 Recommendations
18 Conclusions
1 Report
1 Oral session
1 Letter
1 Event
Activity timeline 5 events
11 Jul
2025
Report published
24 Apr
2024
Report published
18 Mar
2024
Correspondence
26 Feb
2024
Oral evidence
26 Feb
2024
Formal meeting (oral evidence session) · The Grimond Room, Portcullis House
Oral evidence sessions 1 session
26 Feb 2024
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Investigation into student loans issued to those studying at franchised higher education providers
Chris Larmer · Student Loans Company Julia Kinniburgh · Department for Education Susan Acland-Hood · The Department for Education Susan Lapworth · Office for Students
Title HC No. Published Items Response
Twenty-Eighth Report - Student loans issued to those studying at… HC 455 24 Apr 2024 27 Responded
Recommendations & Conclusions
17 results
Clear
3 Recommendation Accepted
Twenty-Eighth Report - Student loa…
Strengthen direct and indirect oversight of franchised higher education providers to ensure standards.
The current regulatory system does not ensure sufficient oversight over franchised providers. OfS publishes conditions that registered providers must meet, and continue to meet. These are designed to protect students, assure quality, and ensure 6 Student loans issued to those … Read more
Government Response
The government will consult on proposals to strengthen oversight of partnership delivery in higher education, setting out these proposals by January 2025, and will develop options for legislative change if required.
HM Treasury
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4 Conclusion Accepted
Twenty-Eighth Report - Student loa…
Agree a shared risk culture and appetite for student funding across DfE, OfS and SLC.
DfE, OfS and SLC recognise they have a shared responsibility to tackle fraud and abuse of student funding although this is not yet fully embedded in their ways of working. In our July 2023report on tackling fraud and corruption across … Read more
Government Response
The government states that a data sharing protocol and a joint incident response plan are now in place between DfE, OfS, and SLC, detailing existing collaboration on risk management and reporting, and confirming OfS has a strategic risk on its register related to data controls.
HM Treasury
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5 Conclusion Accepted
Twenty-Eighth Report - Student loa…
Clearly articulate DfE, OfS, SLC roles and responsibilities for student funding fraud prevention.
Despite the complex regulatory system, roles and responsibilities for fraud prevention, detection and intervention are undefined. The system for paying loan monies and overseeing providers is complicated, involving multiple bodies. The Government Internal Audit Agency (GIAA) and C&AG both found … Read more
Government Response
The government confirms that DfE, OfS, and SLC have agreed a joint Incident Response plan which clearly sets out the roles and responsibilities of each organization for identifying and addressing providers of concern.
HM Treasury
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6 Conclusion Accepted
Twenty-Eighth Report - Student loa…
Clarify definitions of student attendance and meaningful course engagement, publishing guidance swiftly.
Although SLC uses data on attendance to show student’s course engagement, and therefore pay loans, there remains no agreed definition of what constitutes attendance or engagement. SLC requires providers to confirm that students are attending their courses before it will … Read more
Government Response
The government published guidance on attendance management on the Student Loans Company website in May 2024, clarifying expectations for student attendance and engagement after extensive stakeholder engagement, and will take action if providers have weak approaches.
HM Treasury
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1 Conclusion Accepted
Twenty-Eighth Report - Student loa…
Committee took evidence on student loans for franchised higher education providers.
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Education (DfE), Office for Students (OfS) and Student Loans Company (SLC) on student loans issued to those studying at franchised higher … Read more
Government Response
The government states that the OfS intends to publish student outcome indicators for a pilot group of lead providers and their delivery partners in 2024, with full publication for all partnerships expected during 2025.
HM Treasury
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7 Recommendation Accepted
Twenty-Eighth Report - Student loa…
OfS lacks transparency regarding performance of unregistered franchised providers and their partnerships.
OfS publishes information on a registered provider’s performance that shows whether students have completed their course and progressed into work or further study. OfS publishes information for each lead provider and any registered franchised provider. Around two-thirds of franchised providers … Read more
Government Response
The OfS intends to share, in autumn 2024, student outcomes indicators with each lead provider that show the performance for each of its delivery partners. The OfS intends to publish student outcome indicators for a pilot group of lead providers and each of their delivery partners in 2024, and expects to follow this with publication of this data for all partnerships during 2025.
HM Treasury
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8 Conclusion Accepted
Twenty-Eighth Report - Student loa…
Some franchised higher education providers exhibit significantly poorer student attainment and progression rates.
OfS told us that, for full-time students doing first degree subjects, it would normally expect at least 80% of students to complete their course and progress to further study or professional employment. Across the higher education sector, around 90% of … Read more
Government Response
The OfS intends to share, in autumn 2024, student outcomes indicators with each lead provider that show the performance for each of its delivery partners and intends to publish student outcome indicators for a pilot group of lead providers and each of their delivery partners in 2024.
HM Treasury
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10 Conclusion Accepted
Twenty-Eighth Report - Student loa…
Unregulated use of agents and incentives in student recruitment risks mis-selling and inadequate oversight.
Some providers use agents or offer financial incentives to recruit students, practices that are not regulated.20 DfE told us it is planning to look at the use of agents, focusing particularly on whether there is any mis-selling of courses from … Read more
Government Response
The government will ask the Office for Students (OfS) to consider requiring providers to publish details on the proportion of tuition fees they retain and for what purposes when the OfS next makes changes to ongoing conditions of registration, and highlights the publication of a governance framework by UUK.
HM Treasury
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13 Conclusion Accepted
Twenty-Eighth Report - Student loa…
Increasing financial pressures and varied performance affect higher education sector sustainability.
In June 2022, we reported that higher education providers face long-term, systemic, pressures on their financial sustainability and viability.30 We asked about the sector’s current financial sustainability. DfE referred to the most recent OfS report, published in May 2023, which … Read more
Government Response
The OfS intends to publish an Insight brief that sets out the risks and benefits of franchise arrangements, with a focus on the expectations placed on lead providers for effective management and governance of partners, and will consider financial arrangements for franchise partnerships in the scope of any investigations it carries out into the quality of franchised courses.
HM Treasury
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18 Conclusion Accepted
Twenty-Eighth Report - Student loa…
Universities UK develops new governance framework for providers to detect unusual or suspect behaviour.
Universities UK described how it is developing a new governance framework to support providers in identifying the ‘triggers’ (through data monitoring and/or observation) which can alert them to potentially unusual or suspect behaviour. It will set expectations that providers have … Read more
Government Response
Universities UK (UUK) published governance framework for lead providers to support senior leaders in universities to spot and manage risk in franchised partnerships.
HM Treasury
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19 Recommendation Accepted
Twenty-Eighth Report - Student loa…
Current lack of clear guidance on student attendance for loan payments is unsatisfactory.
We asked why, considering that student loan payments are made based on attendance data, there is no guidance on what constitutes attendance.45 DfE noted that ‘effective’ course attendance and engagement will vary by course and institution. DfE pointed to, for … Read more
Government Response
The department published on the Student Loans Company website (May 2024) guidance on attendance management, against which providers can be held to account in relation to the release of SLC tuition fee payments.
HM Treasury
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22 Conclusion Accepted
Twenty-Eighth Report - Student loa…
Formal fraud enforcement roles for SLC and OfS are lacking and need clarification.
The C&AG’s report noted that GIAA concluded that neither SLC nor OfS have a formal fraud enforcement role and highlighted the challenges in gaining assurance over the legitimacy of funding applications.57 DfE told us that it is looking at formal … Read more
Government Response
The department has agreed a joint Incident Response plan between DfE, OfS and SLC for responding to cases where there is a potential risk to public funding which sets out the roles and responsibilities of each organisation.
HM Treasury
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23 Conclusion Accepted
Twenty-Eighth Report - Student loa…
OfS significantly increased regulatory activity and reporting requirements for specific higher education providers.
OfS told us that it has significantly stepped up its regulatory activity for certain providers that feature in the C&AG’s report. This includes additional independent audit to test whether lead provider’s internal controls work effectively in relation to franchise providers. … Read more
Government Response
A data sharing protocol among DfE, OfS and SLC, and a joint incident response plan, are now in place.
HM Treasury
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24 Conclusion Accepted
Twenty-Eighth Report - Student loa…
Increased investment in data analytics by SLC enhances detection of student loan fraud.
SLC told us that one reason behind increases in the value of detected fraud was its investment in using data to detect issues.60 SLC uses a range of data, not just its own. To help with identifying individual-level fraud, it … Read more
Government Response
The department and SLC already collaborate on setting risk appetite and on risk management arrangements.
HM Treasury
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25 Conclusion Accepted
Twenty-Eighth Report - Student loa…
Initial information sharing failures between OfS, DfE, and SLC hindered collective decision-making.
The C&AG’s report identified that a provider had raised concerns with OfS about a franchised provider in May 2022, but DfE was not informed of the issue at the time.62 We asked witnesses why DfE was not told. OfS said … Read more
Government Response
A data sharing protocol among DfE, OfS and SLC, and a joint incident response plan, are now in place.
HM Treasury
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26 Conclusion Accepted
Twenty-Eighth Report - Student loa…
DfE established enhanced information sharing protocols and groups in response to past failures.
DfE explained that, in response, it has established more detailed information sharing protocols. DfE, SLC and OfS meet regularly to share information earlier, including information which may not have been previously shared. DfE told us it also has an intelligence … Read more
Government Response
A data sharing protocol among DfE, OfS and SLC, and a joint incident response plan, are now in place.
HM Treasury
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27 Conclusion Accepted
Twenty-Eighth Report - Student loa…
Information sharing protocols between DfE, OfS, and SLC prevent systemic fraud risks.
DfE recognised the advantages in having transparency between the three bodies, which enables them to take a collective view across an issue.66 OfS noted that there are some legal constraints on how it can share information, so it needs to … Read more
Government Response
A data sharing protocol among DfE, OfS and SLC, and a joint incident response plan, are now in place.
HM Treasury
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Government Response AI assessment · 26 of 9 classified
Accepted 17
Accepted in Part 1
Acknowledged 3
Deferred 4
Rejected 1
Total 9 recs + 18 conclusions
Correspondence 1 letter
18 Mar 2024 Correspondence from Susan Acland-Hood, Permanent Secretary, Department for Education, re Investigation into student loans issued to those studying at franchised higher education providers follow-up, dated 8 March 2024
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