Student Loans and Private Colleges in the UK: The New Controversy

Times Higher Education reports that the Student Loan Access for 23 Private Colleges have been suspended (See story). This means that these private colleges will not be able to recruit any more students for the current academic year. Presumably, they would be able to recruit again for the 2014-15 Academic Year, when their numbers will be capped (they have been uncapped so far). Indeed, this should not amount to much as the main recruiting season, Autumn 2013, is already over, and some of these private colleges have recruited more students than they can possibly service. However, this tale of expansion leading to knee jerk reaction from the Government is yet another illustration how little the Policy Makers understand the Private Providers in Education.

To be clear, private providers have not over-recruited. This is because there was never a limit set on how many students they can actually recruit, and hence the Government's decision, prompted by 'expansion', may appear strange, and may even be open to legal challenge. However, apparently, some of these providers have indeed recruited too many: There are colleges which may have projected, in their application, only a few hundred students but ended up taking in thousands, throwing off the Government's calculation out of the window.

Indeed, this debate is muddled because it is so ideologically potent. The Universities and Colleges Union immediately demanded suspension of funding to all private providers. Others have made the case that taxpayer money should not go to the Private Providers at all. Times Higher Education, a respectable publication, indulged in some sensationalism by dragging Pearson's name in the fray, though Pearson has nothing to do with this other than being the accrediting body of the qualifications that these colleges offer. (Pearson makes only a couple of hundred pounds per student and to describe that as 'Pay Dirt' is purely an attempt to change the debate) Indeed, this is a losing tactic, as, by broadening the debate, the discussion shifts to the issue of principle (private sector delivering public services are all too common and successful in many sectors) and away from the incentives that must be closely examined. 

Why did this 'expansion' happen? One can possibly find the answers in the incentives in the system as well as inadequate control mechanisms. The first reason why the numbers are high this year is because they are uncapped (private providers were allowed to recruit as many students as they can) and will be capped at this year's recruitment levels next year onwards. So, there is a clear incentive for private providers to maximise their recruitment this year, so that this becomes the base number for them from next year onwards. This, indeed, is a dangerous incentive to give to any private provider at any time. The second reason is indeed that there is very little control over how the student recruitment is being done by the private providers: Some of them are already employing agents who are standing in street corners recruiting students who have no intention to study but do not mind turning up for a few days as some colleges are offering monetary incentives and access to maintainance loans etc. These are perfectly legitimate operations at the face of it, and may even pass off as a bold attempt to widen participation, but as everyone involved already knows, this is a quite elaborate con the Government has no means to control and penalise other than taking these knee-jerk measures which affect everyone in the sector.

The obvious conclusion to draw is that the private sector is prone to such practices and therefore be barred from accessing public money, but that's the wrong conclusion. Private sector providers can quite successfully point to less than kosher recruitment practices of public providers, carried on their behalf by their recruitment agents, which are as edgy as that of the private ones. Besides, there are number of private providers who would object to being painted with the same brush, and will point to the variety of the sector. And, besides, broadening the debate into the Public-Private divide effectively allows the malpractices to go unaddressed: When we should be looking at what effectively happened in these colleges, debating whether Pearson has gained from this expansion is indeed the wrong way to start.
The over-eagerness of public universities to paint everything into a public versus private debate continues to obscure the much-required discussion about how to create a responsible private sector in education. There is an argument about keeping the public sector in Higher Education, but this must be debated outside the narrow band of keeping the privileges of those involved in it currently: The wider issues of diversity of goals, the variety of student aspirations and the multiplicity of challenges must be addressed before jumping into the conclusion that there can be only one kind of Higher Education. And, this applies to the proponents of Private Higher Education as well: The succession of failures of the private sector is proof enough that a laissez-faire model may not be the panacea of all our problems with Higher Ed.

This current debate is yet another opportunity to revisit the possibility of creating a more diverse, responsible sector.


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