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Almost £1bn in grants and taxpayer-backed loans to go to private colleges Almost £1bn in grants and taxpayer-backed loans to go to private colleges
(35 minutes later)
Grants and taxpayer-backed student loans going to fund higher education at a handful of private colleges will balloon to £900m next year, the government has revealed.Grants and taxpayer-backed student loans going to fund higher education at a handful of private colleges will balloon to £900m next year, the government has revealed.
The figure represents a 2100% increase in the sums going to such colleges after the Department for Business, Innovation and Skills (BIS) liberalised its policy in order to increase competition with public universities. The figure represents a 2,100% increase in the sums going to such colleges after the Department for Business, Innovation and Skills (BIS) liberalised its policy in order to increase competition with public universities.
Worried about the costs of extra recruitment, fears first revealed by the Guardian last year, BIS stopped 23 of the fastest-growing colleges from recruiting any further students until this September. BIS's fears about the costs of extra recruitment – first revealed by the Guardian last year – led it to stop 23 of the fastest-growing colleges from recruiting further students until September.
In a written parliamentary answer, the higher education minister David Willetts said the total amount going to private colleges would peak at £900m in the next financial year before falling slightly when new recruitment controls are introduced. In a written parliamentary answer, the higher education minister, David Willetts, said the total amount going to private colleges would peak at £900m in the next financial year before falling slightly when new recruitment controls are introduced.
Back in 2010, students at private colleges received just £30m in loan support. Four years on, BIS estimates that the annual amount has reached £400m and will hit £650m next year. In 2010, students at private colleges received £30m in loan support. Four years on, BIS estimates that the annual amount has reached £400m and will rise to £650m next year.
The new figures also reveal that estimated expenditure on maintenance grants, which do not have to be repaid, will hit £250m by 2014-15, which when added to the student loans give a combined total of £900m. The figures also reveal that estimated expenditure on maintenance grants, which do not have to be repaid, will reach £250m by 2014-15, which when added to the student loans gives total of £900m.
Students at private colleges such as the London School of Business and Finance now number around 40,000 and receive 6% of all financial support going to students, up from under 1% just a few years ago. Students at private colleges, such as the London School of Business and Finance, number about 40,000 and receive 6% of all student financial support, up from less than 1% just a few years ago.
The numbers of people studying for sub-degree qualifications such as higher national diplomas have seen the greatest expansion, growing sixfold in 2012-13 alone to hit 15,000, with grants and loans issued rising from £21m to £130m. Sub-degree qualifications such as higher national diplomas have seen the greatest expansion, with student numbers growing sixfold in 2012-13 to 15,000, and grants and loans issued rising from £21m to £130m.
Already facing a major financing challenge, BIS passed on an unplanned 6% cut to teaching budgets at established universities in February. This new announcement comes on top of an admission that billions have been written off what they expect to receive in student loan repayments, increasing budget pressures even more. Already facing a major financing challenge, BIS passed on an unplanned 6% cut to teaching budgets at established universities in February. This new announcement comes on top of an admission that billions have been written off what they expect to receive in student loan repayments, increasing budget pressures even more.
The shadow higher education minister, Labour's Liam Byrne said: "Last week we learned there's a debt time-bomb about to blow up the student finance system. Now, we learn there's nearly £1bn going to private providers. It's now vital we know how much this free market free-for-all is costing taxpayers in private profit. It's now clearer than ever we can't go on like this." The shadow higher education minister, Labour's Liam Byrne, said: "Last week we learned there's a debt timebomb about to blow up the student finance system. Now, we learn there's nearly £1bn going to private providers. It's now vital we know how much this free market free-for-all is costing taxpayers in private profit. It's now clearer than ever we can't go on like this."
A spokesperson for BIS 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.A spokesperson for BIS 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 market place is one of the ways that we will achieve this. "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 targeted controls will remain thereafter to ensure growth in this sector is manageable within our budgets.""Student number controls will apply to alternative providers in 2014-15 and targeted controls will remain thereafter to ensure growth in this sector is manageable within our budgets."