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One myth about alternative providers (APs) is that there is a lack of regulatory oversight and that as a result APs can fall short in terms of quality – thus posing a greater risk for students. In reality, the part of the AP sector in which students can claim student loans is regulated, and this works to ensure academic quality and student protection.

Specific course designation

In order for their students to be able to apply for student loans, APs have to go through a process called ‘specific course designation’. APs must meet criteria set by the Government with regards to four areas:

  • quality assessment
  • academic performance and track record
  • financial sustainability, management and governance
  • course eligibility.

Eligibility for student loans is conditional on meeting all four criteria, not just on application but on a continuing basis.

Quality assessment

In order to qualify for student support, all APs must pass a quality review called the Higher Education Review (AP), currently carried out by the Quality Assurance Agency (QAA).

APs are also subject to annual quality monitoring reviews. In addition, a QAA Concerns scheme can be opened at any time if there are reports of malpractice. Any such reports may trigger a specific investigation, the results of which are made public on the QAA website.

Academic performance and track record

Academic performance is primarily measured using data collected annually by the Higher Education Statistics Agency (HESA), through the National Student Survey (NSS) and the Destinations of Leavers from Higher Education (DLHE) survey.

Other stakeholders, such as the Student Loans Company (SLC) and awarding bodies such as Pearson, can also be consulted if necessary. One key indicator is the continuation rate from first to second year of study. Performance indicator benchmarks are generated using data which is drawn from across the HE sector. These enable effective comparison with other providers, taking full account of differing student profiles.

If the academic performance criterion is not met, the Department for Education (DfE) has the right to impose sanctions on providers, including the suspension of SLC payments and the withdrawal of course designation.

Financial sustainability, management and governance

To ensure students are able to complete their studies, APs need to be able to demonstrate that they are financially sustainable. They submit various financial documents for evaluation to HEFCE (which undertakes this work on behalf of the DfE). HEFCE looks at historical information –externally audited financial statements for the last three years, for instance – as well as looking forward using the AP’s financial forecasts and business plans for the next four years.

HEFCE also assesses information about providers’ management and governance structures. This evaluation is repeated on an annual basis.

Course eligibility

Only certain types of course are eligible for student support. These include undergraduate courses, such as traditional first degree courses, plus foundation degrees, and Higher Education Diplomas and Certificates.

Also eligible are certain types of postgraduate courses, such as MA, MSc and MBA. Whilst many HND and HNC courses have designation, applications from providers for designation for new higher national courses are currently subject to a moratorium by the DfE.

For a course to be eligible, the AP must have degree awarding powers (DAPs) itself or its courses must be validated by an appropriate body, such as a UK institution with DAPs, or for HND and HNCs an awarding body like Pearson Education.

Student numbers

In addition to the criteria above, most APs with course designation are also subject to restriction on the numbers of students that can potentially draw student support. This comes in two forms – a Student Number Control (SNC) and a Student Number Allowance (SNA):

  • An SNC is a restriction on the amount of new students eligible for student support that are admitted each year.
  • An SNA is an overall restriction on the number of students who draw down support at the provider.

Each AP that does not have its own degree awarding powers has either an SNA or an SNC in place, which apply separately to both full-time student numbers and to part-time or distance learning student numbers.

Conclusion

Far from being under-regulated, APs must comply with a range of regulatory processes focussing on many different factors.

In order to have specific course designation APs have to comply with DfE regulation. There are sanctions which can be applied if they fail to meet quality and financial sustainability standards, and there are protections in place for students if their provider decides to leave the market or designation is revoked.

APs also face some regulatory requirements that other types of providers of higher education in England do not; the restrictions on student numbers, for example, are no longer present for HEFCE-funded providers.


This blog post is one of a series on alternative providers. In other posts, we look at the diversity of APs, and at some of the unique ways that APs contribute to the HE sector.

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