Students at private college told to repay grants

http://www.theguardian.com/education/2015/feb/24/students-at-private-college-told-to-repay-grants

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More than 500 students who enrolled in a private college that offered free grants under a government-sponsored scheme have been told they have to repay the money or face action from bailiffs.

The Student Loans Company (SLC) has demanded that thousands of pounds of maintenance grants awarded two years ago to students at the ICE Academy, a private independent college with campuses across the UK, be recovered despite officials recognising they were victims of a bureaucratic fiasco. SLC has already sent 80 cases to debt collectors.

The affected students enrolled in a private college sector that has grown rapidly in recent years following ministerial reforms aimed at providing more competition for established universities.

On Tuesday the public accounts committee criticised the Department for Business, Innovation and Skills (Bis) for its lack of oversight of the changes, which have cost taxpayers more than £1bn. Margaret Hodge, the committee’s chair, has said a National Audit report on the private college sector was “one of the most shocking” reports she had ever read.

Some of the students affected by SLC demands told the Guardian they felt betrayed after they were awarded the money in good faith to help fund living costs while studying at the ICE Academy.

Bis said the college later admitted setting up three extra campuses – in Manchester, Croydon and Bedford – without getting official sanction to register students using government finance to pay their tuition fees. The extra campuses meant ICE could readily generate upwards of an extra £4m a year in turnover.

Following an investigation in January 2014, Bis halted all student funding, effectively shutting down the campuses, and demanded that ICE repay the government loan money it had taken from students. Bis issued an apology to students, saying: “The department is sorry that ICE Academy has put these students in such a difficult position.” It accused ICE of providing it with “misleading information”. ICE rejects the claim and says it will take action in the courts.

A student representative enrolled at ICE’s Bedford campus said he and dozens of others whose studies were halted midway through their two-year diploma courses were being threatened with bailiffs by phone and in writing despite being victims.

The representative, who did not want to be named, said, “I’ve had that phone call, where they’ve said bailiffs will come to your door, we’re going to send [the case] to a credit reference agency and they’re going to pick up goods. That’s what they’ve said over the telephone.

“One lad in particular, he was very emotional. His wife had just given birth … the poor child was in an incubator. And while his child was in an incubator, he came across to myself crying, and he goes: ‘Look what I’ve got as a letter.’”

That letter, which the Guardian has seen, was issued by SLC late last year and says “further action may be necessary to obtain full recovery of the balance due” if a settlement is not reached for the sum of £3,250.

The student representative said SLC should have carried out due diligence before handing out support to hundreds of people wanting to better their lives through study. “I want Bis to own up that student finance made the mistake through no fault of the students,” he said.

Bis has said all affected students were offered the option of transferring study to other institutions to continue their courses. But Shahjhan Khan, 34 from Denton, Manchester, said nearby colleges were either full or refused to take him and his fellow students while their status was uncertain.

He said he was now afraid to pick up the phone in case it was one of scores of calls from SLC demanding repayment of £4,300. Enrolled to study business and management at ICE’s Manchester campus, Khan said: “It’s screwed my future up. I’m struggling to keep my family going because of this.

“I gave up my job for this [qualification], I gave up my other commitments for this. But If I’d stayed with my job, I would have been in a better position. None of us know what to do next … The Student Loans Company have screwed us to the limit.”

A Bis spokesperson said: “It is very regrettable that ICE Academy has put its students in such a difficult position. We continue to explore options to assist any affected students.”

SLC said getting bailiffs involved was always a last resort. It could not readily provide a figure for the total sum of monies it was demanding from all 575 students.

The shadow universities minister, Liam Byrne, said this was further proof that the private college experiment had failed. “The government have absolutely no clear plan for how to deal with private colleges. The amount of public money going to private providers has ballooned to £600m a year, and real concerns have emerged on standards of governance and accountability. Students have been left to pay the price for ministers’ failed free market experiment in higher education,” he said.

ICE said it supported the students in their fight to have the repayment demands rescinded. The college said it disputed supplying misleading information and had evidence to the contrary, which it would provide to court in due course. “We have fully co-operated with all the agencies,” it said.