Source: Alamy

Funding fears: maintenance loans could be scrapped for those on HN courses

The government has admitted that retention rates are ¡°very low¡± at some private colleges, as officials show growing concern over how some for-profit institutions are benefiting from public funding.

The Department for Business, Innovation and Skills has also signalled that it may remove from the ÖйúAƬ funding system sub-degree higher national qualifications, which have attracted soaring numbers of students under the policy of unlimited expansion for private providers allowed by David Willetts, the universities and science minister.

Allegations of misuse of public funding by the London School of Science and Technology centred on claims that students could sign up to HN courses to access Student Loans Company funding, but fail to attend classes.

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Meanwhile Pearson, the FTSE 100 education company that awards HN qualifications and is paid by colleges offering them, has launched what it calls a ¡°major review¡± of the courses.

Vocational higher national certificates and higher national diplomas allow private colleges to offer SLC-funded courses under an arrangement with Pearson, rather than having to reach the validation agreements with universities that would be needed to offer degrees. One for-profit, St Patrick¡¯s International College, recruited 4,000 students with SLC funding to HN courses in just one year ¨C equivalent to the size of a small university and giving it more SLC funding than the London School of Economics.

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BIS hosted a meeting for private providers on 17 June to explain why it is considering requiring them to supply information to the ÖйúAƬ Funding Council for England, by making their courses ¡°prescribed¡± under the Further and ÖйúAƬ Act 1992.

A presentation given by BIS officials, seen by Times ÖйúAƬ, explains that the move is ¡°to ensure students and government are getting value for money¡±. It adds that there is ¡°very little data on outcomes from some alternative providers. Some evidence suggests that a few alternative providers have very low retention rates.¡±

On 19 June, BIS published a consultation on changes to further education funding. The consultation proposes moving HNs ¡°from ÖйúAƬ funding to [further education] Advanced Learning Loans¡±. It also poses the question of whether maintenance loans should be scrapped for students pursuing HNs if the courses are transferred to the further education budget.

BIS says in the consultation that ¡°expansion in [HN] provision at private (alternative) providers has not been in priority vocational areas¡±. It also notes that Pearson¡¯s HNs are ¡°the only external awarding body qualifications to attract ÖйúAƬ funding (other than some teacher training courses)¡±.

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BIS¡¯ spokesman said that there were ¡°no plans to remove designation of HNCs/HNDs for student support in the 2014-15 academic year¡±.

Pearson¡¯s consultation, which closed in May and will lead to changes from September, says the company is looking to ¡°update and improve¡± HNs and asks for views on whether the qualifications are ¡°sufficiently rigorous and demanding¡±.

john.morgan@tsleducation.com