Higher education students ‘being mis-sold courses’

8 Dec 17

Some students could be being “mis-sold” degree courses, government auditors have suggested in a critical report on the higher education market.

The National Audit Office said competition between universities and colleges had not yet proved effective, and two thirds of students did not consider their courses value for money.

Although the government was increasingly relying on market mechanisms, such as competition and student choice, to improve quality and value for money in the HE sector, these were not working well.

“If this was a regulated financial market we would be raising the question of mis-selling,” said NAO head Amyas Morse.

Student choices were not always informed, the NAO suggested.

Although, on average, graduates enjoyed an earnings premium of 42%, earnings for graduates of some institutions and some courses were less than for non-graduates.

Given the level of student debt – now an average of £50,000 following a three-year course – prospective students are in a “potentially vulnerable position” when deciding whether to enter higher education, the NAO said.

It noted only one in five students make use of the information available to help them select their course and provider.

Price competition between HE providers was not meaningful and incentives for competition on course quality were weak, the NAO added.

In 2016, almost all (87 of 90) of the top English universities charged the maximum £9,000 a year for all courses.

Morse said: “We are deliberately thinking of higher education as a market, and as a market it has number of points of failure.

“Young people are taking out substantial loans to pay for courses without much effective help and advice, and the institutions concerned are under very little competitive pressure to provide best value.”

The auditors called on the Department for Education to improve its oversight of the HE market.

A DfE consultation on a new regulatory framework was launched in October, with a focus on improving student choice and seeking to address other market weaknesses. This closes on 22 December.

Universities minister Jo Johnson told the BBC yesterday he expected new regulations in the new year will bring excessive pay for vice-chancellors “under control”.

He said he was “absolutely convinced” the new regulator, the Office for Students, would tackle pay concerns.

Johnson spoke after it was revealed the former vice-chancellor of Bath Spa University was paid £429,000 in her final year for “loss of office” on top of her £250,000 salary. Professor Christina Slade ended her role as vice-chancellor at the university in August this year. 

Responding to the NAO report, a Universities UK spokesperson said: “Following the shift in England from public funding to increased fees, students are understandably, and rightly, demanding greater value for money from their university.

“Universities are responding to this and are improving the information to students about courses to ensure that their experience matches their expectations.”

The spokesperson added that course satisfaction was at “record levels” and said the sector intended to do more to ensure student choices were informed.

The DfE has been approached for comment. 

  • Vivienne Russell

    Vivienne Russell is managing editor of Public Finance magazine and publicfinance.co.uk

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