Private college funding to hit £1 billion

In a written parliamentary answer published on 28 March, universities and science minister David Willetts said his department expects the amount of taxpayer-backed loans awarded to private college students to rise to £650 million in 2014-15, up from £400 million this year.

That represents almost a 22-fold increase in student loans at private colleges since 2010 when just £30 million was awarded in loans to students at private higher education providers.

Another £250 million will also be awarded in non-repayable maintenance grants to students at private college students in 2014-15 – taking the overall student support to £900 million.

That expenditure is roughly equivalent to the total income received by four to five mid-sized public universities.

In 2015-16, some £850 million of student support will be awarded to students at private colleges, Mr Willetts also said.

Liam Byrne, the shadow universities, science and skills minister, said: “It’s now vital we know how much this free market free for all is costing taxpayers in private profit.”

He added that “we can’t go on like this”.

The rapid rise in student loan payments follows the liberalisation of  policy to allow private providers to compete with public universities.

However, concerns over the costs of extra recruitment last year led the government to freeze recruitment at 23 of the fastest-growing colleges until September.

Sub-degree qualifications such as higher national diplomas have seen the greatest expansion, with student numbers growing six-fold in 2012-13 to 15,000.

Last month Times Higher Education revealed that two private colleges, GSM London and St Patrick’s International College, each now receive more Student Loans Company funding for their teaching than the London School of Economics.

News of the increased student support comes as teaching budgets at public universities were slashed by 6 per cent last month.

A spokesman for the Department for Business, Innovation and Skills said the government wanted to “offer students more choice and flexibility in how and where they study by increasing the range and type of opportunities that are available to them.

“Encouraging new alternative providers into the marketplace is one of the ways that we will achieve this.”

Student number controls will apply to alternative providers in 2014-15 and other controls will remain in place in 2015-16 when student number controls are lifted, he added.

jack.grove@tsleducation.com