Almost £1bn in grants and taxpayer-backed loans to go to private colleges

The Telegraph is reporting that 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 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.

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 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 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, number about 40,000 and receive 6% of all student financial support, up from less than 1% just a few years ago.

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…

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.”…

More at: Almost £1bn in grants and taxpayer-backed loans to go to private colleges

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