Experts to investigate allegations of student loan fraud

A Government investigation is set to begin into claims that student loan fraud is being committed by individuals with no intention to study.

There are at least six ‘franchised universities’ where allegations of fraudulent activity have been made.

These franchised providers are smaller colleges affiliated with established universities which often have lower grade requirements.

One such institution is Oxford Business College, affiliated with the University of Oxford but much easier for students to enrol in.

In an investigation into fraudulent activity, The Sunday Times reported that one afternoon, “fewer than a dozen people entered and left the [main college] building”.

Oxford Business College is one of many franchise providers which have opened across the country recently in the higher education sector.

Economic troubles resulting from tuition fee caps and inflation have made necessary an increase in student numbers beyond established university campuses already at full capacity.

Education Secretary Bridget Phillipson called the issue “one of the biggest financial scandals in the history of our universities sector” and vowed she would “not tolerate a penny of taxpayers’ money being misused”

The Student Loans Company (SLC) has identified suspicious applications at some franchised universities, which include falsified documents and duplicated addresses.

Some individuals enrol in franchised providers for their first term, collect their loan, and ‘drop out’ before re-enrolling the following academic year, without intentions to repay.

Although repayment should commence following course completion and when income rises above £25,000, in cases where students have lied about their identity or never earn over the threshold, the debt is often never repaid and the taxpayer foots the bill.

Education Secretary Bridget Phillipson called the issue “one of the biggest financial scandals in the history of our universities sector” and vowed she would “not tolerate a penny of taxpayers’ money being misused”.

Many franchised universities have also enrolled students without adequate levels of English, and have even accepted “screenshots of Duolingo tests” as valid indicators of language capacity, reported The Sunday Times.

The rise in franchised providers first started in 2011, when private for-profit companies began to step in and offer courses on behalf of established universities, allowing them to boost student numbers and revenue.

Their grade requirements are often substantially lower, sometimes taking work experience over traditional GCSEs and A Levels.

According to figures cited in The Sunday Times, 81% of students at franchised providers are aged over 21, with 61% of these coming from the UK’s poorest communities

The lead university in each situation is the awarding body of any qualifications and is expected to track academic standards such as attendance. The franchised providers, without university status, only oversee the teaching.

Franchised providers have allowed students from non-traditional backgrounds to access higher education otherwise beyond their reach, especially for mature students.

According to figures cited in The Sunday Times, 81% of students at franchised providers are aged over 21, with 61% of these coming from the UK’s poorest communities.

However, many believe that the franchised sector has been allowed to grow without regulation, allowing fraud to flourish and go unchecked up until now.