The Student Loans Company (SLC) is stepping up its efforts to combat student loan fraud. This decision comes on the heels of troubling allegations of financial fraud perpetrated against Romanian students at several of these colleges. During the past two-year interim period, the SLC has instituted sweeping new controls to tighten things up and better protect ever-scarcer public funds. This program has largely allowed the company to work closely with law enforcement agencies to steer its investigations.
The spotlight on these issues intensified following a Sunday Times investigation, which described the situation as "one of the biggest financial scandals in the history of our universities sector." In reply, Labour’s Bridget Phillipson, one of the architects of the government’s education revolution, pledged her focus on protecting taxpayers’ cash.
"I will not tolerate a penny of taxpayers' money being misused," said Bridget Phillipson.
The Office for Students (OfS) have been making moves in this space too. Susan Lapworth, OfS chief executive, denounced the “sharp practices” uncovered in the probe as “entirely unacceptable.” The OfS has considerably greater powers now to protect public money. On the other hand, Bridget Phillipson is currently leading some legislation to make these measures even more robust.
Crime prevention measures aren’t just happening at the SLC and OfS. The DfE has taken some first steps to clamp down on bad franchise operators. Changes to this department – especially to restructure regulations – will make the OfS more suitable to protect taxpayer money.
The Public Sector Fraud Authority (PSFA), part of the Cabinet Office and Treasury, has been called in by Bridget Phillipson to coordinate government responses and support ongoing investigations. This change is to counter the danger of future “organised recruitment” of Romanian nationals joining courses in suspicious circumstances.
A spokesperson emphasized the government's stance on fraud prevention:
We’re going to enact strong new legislation. This should strengthen the OfS’ hand to expeditiously weed out the bad actors who cheat the system in pursuit of doing no harm.
In encouraging news, Universities UK has welcomed the government’s intention, first set out in the White Paper, to introduce a requirement for franchise partners to register with the OfS. This provision is meant to promote increased transparency and accountability among institutions of higher education.
The SLC’s hard work has already paid off. In one case, they found clue-ridden applications using doctored documents and copy-pasted addresses. The problem is that franchised colleges have been roping in students who don’t have the English language proficiency. This begs the question of how legitimate their academic interest really is.
As of 2023, student loan debt in the UK has reached an all-time high of £236.2 billion. In England, loans are written off after 40 years if they haven’t been paid. This underscores the vital importance of stopping improper payments before they occur.
