Education Secretary Bridget Phillipson has instructed the Public Sector Fraud Authority to investigate allegations of widespread student loan fraud, particularly involving Romanian nationals at franchised universities. The move follows a Sunday Times investigation that revealed concerns over individuals enrolling in degree courses with no genuine academic intent to secure loans.
Phillipson described the revelations as “one of the biggest financial scandals in the history of our universities sector” and vowed to protect taxpayers’ money. She criticised the previous Conservative government for expanding franchised education in 2016 without addressing financial instability, which she said paved the way for abuse.
The investigation found that most students under scrutiny are at “franchised universities”—colleges paid to provide courses for established universities. There are concerns of “organised recruitment” of Romanian nationals to enrol on courses. The Student Loans Company is working with law enforcement to investigate the prevalence of Romanian students at certain institutions.
Phillipson has promised new legislation to give the Office for Students (OfS) tougher powers to intervene quickly. The Department for Education confirmed that the OfS has been asked to clamp down on franchising, and the Public Sector Fraud Authority will coordinate the cross-government response. Where fraud is found, the government has powers to claw back payments.
Susan Lapworth, chief executive of the OfS, called the alleged practices “entirely unacceptable” and a “shocking misuse of public funding” that takes advantage of genuine students.
