England’s higher education regulator is to launch its first investigation into “franchise students” enrolled on university courses run by subcontractors, amid concerns about poor quality and potential abuse of student loans.
The Office for Students (OfS) said it is investigating how 6,500 students are taught under franchise by subcontractors of Leeds Trinity University, saying it will look at whether the courses are of high quality and whether Leeds Trinity has “effective management and governance in place” for overseeing its partners.
The move comes as MPs on the parliament’s public accounts committee question leaders from the OfS, the Department for Education and Student Loans Company in its own inquiry into university franchising.
The OfS said: “The opening of the investigation means that the OfS has identified potential concerns that require further scrutiny. The decision to open an investigation does not mean that any form of non-compliance or wrongdoing has taken place.”
A spokesperson for the university said: “Leeds Trinity University will work with the OfS to ensure transparency and assurance in relation to the institution’s franchise partnership arrangements.
“Widening participation is at the heart of Leeds Trinity’s ethos and has been for many years. Franchise partnerships are one of a number of ways in which the university enables social mobility and raising aspirations in groups traditionally underrepresented in higher education.”
Under franchise arrangements, subcontractors such as private colleges teach students on courses overseen by a university that awards degrees. Franchise students can apply for government-backed tuition and maintenance loans, with the university paid up to £3,000 per student out of their £9,250 tuition fee.
The National Audit Office has warned that loan fraud among franchise students accounted for more than half of the student loan fraud uncovered in 2023, despite franchise students making up only about 6% of England’s student loan recipients.
Franchise student numbers have rocketed, with full-time enrolment rising from 34,000 in 2018-19 to 90,000 in 2021-22. The courses often have low entry requirements, and have been successful as a route into higher education for mature students or those from disadvantaged backgrounds.
Prof Nick Braisby, vice-chancellor of Buckinghamshire New University, said: “There’s a nervousness within the OfS and the DfE, that they don’t have sufficient grasp of questions such as is public money being spent for the purpose for which it’s intended.
“It was a few weeks ago that the OfS announced that it was going to look at franchise provision. But yet again it’s investigating an institution that has a very good reputation for extending higher education to people who have been traditionally denied it.
“I think the OfS isn’t considering carefully enough that poor quality could be in any part of the sector, in theory, but it seems to have a relentless focus at the moment on one particular part of the sector, and that’s unfortunate.”
David Kernohan, deputy editor of the Wonkhe higher education site, said franchising has become an attractive option for cash-strapped universities, being cheaper to run owing to lower overheads and less well-paid staff.
“Bringing university-level study to parts of UK society that have not previously been able to access it is a noble aim, but there has been concern that some universities may be cutting corners on governance and oversight and that some of these students might not be getting the positive experience they deserve,” Kernohan said.