‘Tighter controls needed to stamp out student loan fraud’

7 Mar 18

The government must do more to combat student loan fraud, which amounted to £10m over two years, the Public Accounts Committee has said.

In its report on alternative higher education providers, the PAC revealed the Student Loans Company paid out £10m to ineligible students in 2014-15 and 2015-16.

Committee chair Meg Hillier commented: “Fraud is a real kick in the teeth for the honest student and the honest taxpayer.

“That is why we are particularly concerned about it.”

The report notes that despite the Student Loans Company previously committing to recovering the total of £45m in erroneous payments from 2010 to 2016, it had only managed to recover £11m.

The PAC report also highlighted shortcomings in the Department for Education in delivering “timely data”, which would allow for a more thorough monitoring of alternative higher education institutions.

Consequently, the PAC have called on the DfE, the Student Loans Company and the soon-to-be opened Office for Students, to tighten up on data collection and monitoring of provider performance.

Additionally, the report highlighted concerns that one in four students at alternative higher education providers did not complete their courses.

It is feared that not only are these students not receiving the skills they require but that they may never repay the public money borrowed to fund their studies.  

As such, the PAC has recommended that the Office for Students should clarify what - in addition to existing sanctions- it will do make sure that more students complete their courses.

A Department for Education spokesperson said: “Alternative providers make a strong contribution to the UK’s higher education system, offering greater choice, diversity and opportunities for students.

“As the PAC report has recognised, we have strengthened controls and have robust systems in place to identify and tackle fraud in alternative providers, but clearly there is more to do.

“The Office for Students will bolster oversight of these institutions even further by putting students at the heart of everything they do and using its powers to hold these providers to account.”

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