Sunday Posts

Times Higher Education reports that two private colleges in London has received more money in public funding than the London School of Economics and School of Oriental and African Studies. ( See story here ) While we may argue on the merits of giving public money to private providers, as is the case in myriad public services, even the staunchest free market advocate may accept that this is perverse. One can't even argue that this is market forces at work: There is no way to explain why British students will prefer almost unknown institutions over the better known universities, except that we have managed to craft a system which has created all sorts of wrong incentives for over-recruitment. It seems that despite all the warning signals of the student loans scandals from the US, the government in England has managed to create a system and break it within barely two years. Indeed, one would argue that stories such as these is a mere case of jealousy of the public sector. But th...

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 appea...