It’s time to take a closer look at an “opaque corner” of higher education

Mark Leach argues that universities need to get ahead of the regulatory and reputational issues surrounding franchising courses to for-profit colleges

Mark is founder and Editor in Chief of Wonkhe

Following a New York Times expose last week and the analysis from my colleague Jim Dickinson this morning, it’s becoming clearer than ever that the sector needs to get to grips with franchised provision, before the regulator comes knocking.

There are urgent questions to answer on public information, finance, quality and more about this “opaque corner” of higher education, as the NYT described it, in which courses are taught at one kind of institution (in this case, a for-profit higher education provider) and either franchised out or validated by another (for example, a university).

At Wonkhe, we have struggled to write about this issue – on several occasions, we have faced legal threats aimed at silencing the discussion. So the New York Times deserves credit for delving into this issue in the public interest.

Follow the number controls

In England, before student number controls were removed, franchising was a comparatively modest affair. Then universities minister David Willetts suspected that the kind of innovation or geographical distribution that might be delivered by a franchisee was being hampered by universities that wanted to keep all the available funded places to themselves.

So a combination of raising tuition fees, running almost all funding for HE through those fees, and taking the controls on numbers off in the last decade was, at least in part, an attempt to liberalise the market. And plenty of providers sought “course designation” from government – a system that allowed their students to access public student loan finance, with their programmes validated by a university or another body with awarding powers..

Arguably the lack of quality control over the old government designated courses list and the rapidity of growth was a liberalisation too far – hence a temporary calming of that activity in the wake of some scandals, the development of the Higher Education and Research Act 2017 and the resultant Office for Students.

But both on public information and the regulation of minimum outcomes, in regulatory terms, we may not be much further forward than in the middle of the last decade.

Worryingly, it appears that some unregulated private providers have attempted to get onto the OfS register only to be rejected – and are now delivering franchised provision instead, often at a decent scale. The point of the OfS register was to enforce shared standards of provision across the whole HE system; it’s not clear that it’s working.

Not the metrics again

Some in the sector reject outright the threshold outcomes regime for continuation, completion and progression on the basis that students and providers should be free to choose each other as long as good information is there, though there are debates about, and research on the extent to which, applicants – and which type of applicants – actually make use of the data on offer.

Many also question the central premise of publication of data that applicants can make decisions based on data on the satisfaction and outcomes of past students, on the expectation that something similar will be experienced by future students.

There are also questions about the quality of data on new programmes or providers, or small cohort denominators, and question marks over whether it’s ethical to publicise good satisfaction and outcomes from a provider where the programme numbers are poor (especially when franchised out or on a satellite campus), and vice versa.

But if you accept that information at least plays a role in keeping everyone honest, if not necessarily informing choice, it is problematic that it is difficult in a number of cases where agents are selling HE to work out which providers are involved, and even when you do, what levels of satisfaction and outcomes are actually attached to the programmes.

The sector in England pretty much ignored Michelle Donelan’s instruction to attach this sort of data to adverts last year – and even if it had complied, it was never clear whether the edict should apply to agents. As Jim points out today, the information that is available to students is often missing or can often point them to quite different locations or providers than those we’re talking about here.

There are also significant gaps around provision that is regulated in one part of the UK and then delivered in another – given the confusion that might arise as to which regime is making which claims over quality or process.

And even if providers were following DfE’s advice, said advice applies to providers based in England – leaving universities based in the devolved nations who run branch campuses or have franchised provision in England not covered. The deeper you dig, the bigger the regulatory and policy holes you uncover.

As Jim points out in his piece, the rise of domestic agents in shopping centres and on TikTok, and going door to door, all hinting at cash for enrollment, should also cause universities to ask what exactly is being sold in their name, and how.

Finding clarity

It’s clear that the sector ought to look at the nature of the relationship between franchised from universities and franchised to private providers, particularly as this form of provision continues the inevitable path of growth with fair market and regulatory winds behind it.

Some of that provision is truly innovative, high quality and delivering the kind of flexibility that many have craved. That has led many new specialist providers to argue, often here on Wonkhe, that the regulatory burdens facing new providers ought to be relaxed.

But this other kind of provider- usually specialising in business and health courses – arguably needs more scrutiny, not less. Much of the quality assurance and oversight apparatus in franchising universities that exists dates back to different and more modest times, designed for a light touch look at teaching, learning and assessment in an FE college rather than recruitment practices, facilities or mental health services at a growing private provider with a profit motive.

The large amounts of profits and dividends being extracted from the public student loans system by many of these providers should give every university that enters into a relationship with them a moment of pause. The money that is being paid out in dividends is de facto money that is not being spent on staff benefits, improving student experience, or investing in campus facilities. OfS certainly seems concerned that governors may not be fully aware of these sorts of relationships and what they entail.

And the sector almost certainly needs a fresh look at how collaborative partnerships are struck and managed – if the B3 data has not already sparked internal scrutiny at universities.

Ultimately, as ever this is really all about the money. Plenty of providers, not directly regulated by OfS, seem to be using domestic agents to sell “full time” courses on the promise of part-time attendance and student finance – and yet students struggle to see who is franchising, and can’t tell what the outcomes or satisfaction are, for either the course or the provider.

At best it’s a confusing situation in which opacity serves the interests of providers and investors rather than that of students. At worst, it’s an enormous regulatory muddle that leaves the door open for a small but growing number of individuals to profit enormously at the expense of students and the taxpayer.

As financial pressure on the mainstream sector grows, and the pressure to grow numbers through whatever means necessary intensifies, now feels like a good time to shine a brighter spotlight on this “opaque corner” of the sector, before long term reputational damage is done to the whole system.

5 responses to “It’s time to take a closer look at an “opaque corner” of higher education

  1. All rather reminiscent of the HE scandals that the National Audit Office reported on decades back, with 2 Us in particular cashing in on dodgy degrees delivered aboard – here it is dubious recruitment and delivery closer to home, (mis)using a U’s brand-value.

    As ever, the HE Industry proves incapable of timely preventive preemptive self-regulation and hence somebody has to come along and belatedly close the stable door. And the self-righteous HE sector moans about the idea of external regulation & meaningful accountability…

    Franchising works fine for McDonalds because it has robust & competent management of the concept; too many Us lack efficient managerial competence and effective governance oversight to be in this territory.

  2. This reminds me of the Panorama investigation into student loan fraud in 2017 ( Whilst this was pre-OfS not much has changed and the increased financial pressure faced by universities is only driving them towards more risky behaviour.

    This had been a problem in the FE sector with the sub-contracting of HNC/Ds, though that has been curtailed by the ESFA with requirements on sub-contracting strategies. This has probably also led to unscrupulous providers to target universities.

  3. This and Jim Dickinson’s piece raises really important issues. Perhaps if OfS spent less time chasing Daily Mail headlines (anyone remember the 2021 report on Spelling and Grammar?), and dreaming up ridiculous new bureaucratic burdens (B4 and the retention of student assessed work), it could focus on the type of significant governance, quality and standards issues highlighted by these articles.

  4. I’ve left a longer comment on Jim’s piece, but in addition to the calming referenced here in the course designation days from some policy levers there was also a significant step up in scrutiny and engagement of providers. This was developed in a risk based fashion, and collected intelligence and other information that allowed action. Most of this was invisible to the sector of course, but it did work to address issues and was probably as strong as it could be in the legislative environment we were working in pre-2018.

  5. Excellent piece here Mark, Jim and team. Franchise provision is a loophole left in the Act and one might argue left poorly reported and regulated as well. But we are a long way beyond the ideologues of Cameron and Osbourne. There is a continuing exponential growth in private for profit provision, much with poor quality outcomes, even after regression is done to account for learner demographics. It is a sluice-gate for profits made with public money to produce returns for international venture capital, which we should close. We must avoid the US situation that mis-sells HE to the poorest, producing massive profits at public loan and private individual cost. It costs the Government, damages the UK reputation and short-changes some of the most vulnerable learners.

    How to overcome the monster? As a first step, impose conditions on franchising – only permissible where it is strategically necessary, as in FE. That would push privates delivering the quality we expect from English HE providers, to register, and be judged, on their own merits, as the best already are. There would be no cost to Treasury, and whilst it would require some work in some institutions as they wean themselves off the fizzy pop of private franchise income, more public money would stay funding English HE at a time when the country can ill afford to give it away.

Leave a Reply