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Students need insurance scheme in case of closures, OIA warns

The Office for the Independent Adjudicator for Higher Education (OIA) has today warned “it seems likely that we will see more closure events” in the next few years.

The university ombudsman has said students need “some kind of insurance scheme” in the eventuality their higher education provider (HEP) has to cease operations or close down courses.

The Office for the Independent Adjudicator for Higher Education (OIA) has today (19 November) recommended that “there is a need for some kind of insurance scheme that could help protect students, give them confidence in the system and payout in the worst-case scenario”.

The comment is from a briefing note on the impact that course, campus or provider closures have on students which warns “it seems likely that we will see more closure events” in the next few years.

The briefing note comes a year on from the closure of GSM London, the independent privately-owned provider in Greenwich that shut down in November 2019

The OIA was part of a task force convened to manage the closure. The briefing note discusses the experience OIA had as an ombudsman for students affected by the closure and outlines how it handled complaints from GSM students. It recommended that one complainant receive £6,500 and another £4,582, with others receiving smaller sums.

The impact of the coronavirus pandemic means that providers are looking at their provision in a different light
– Felicity Mitchell, OIA 

Although the new Department for Education restructuring regime and the Office for Students (OfS) student protection directions “go some way” to mitigating the potential impact on students and risk of a “disorderly market exit”, more should be done, the OIA said. “We would like to see more discussion and policy thought about who should provide [a] vital safety net and how it should be paid for,” it said.

There were around 3,500 students at GSM when it went into administration. Over 2,600 of them transferred to a different provider to continue their studies, “but there may be some who do not return to higher education at all and so may never achieve their intended level of qualification,” the OIA reflected.

The ombudsman acknowledged that those students recommending for compensation may not receive the full amount because GSM was in administration when it made its recommendations. “The reality is the actual amount which students will receive is likely to be considerably less than the sum we consider is reasonable,” it said.

GSM was not an OfS registered provider at the time of its closure but the University of Plymouth, its degree-awarding partner, was and therefore had a Student Protection Plan that referenced students “at its validated partners”.

“Despite the best efforts of many involved, the closure of GSM highlighted some gaps in provision for students in this position at the time. In any closure, whether course or campus closure or the closure of a whole provider, there are likely to be some students who are badly affected and for whom there are no suitable alternative arrangements that don’t involve additional financial costs,” the report continued. “It is important that meaningful remedies are available for students in such circumstances.”

The closure “highlighted the importance of retention of and access to student records”, the OIA added.

Independent adjudicator Felicity Mitchell said: “Over the years we have seen a small number of complaints relating to closures, mostly arising from the closure of a course or department. Complaints often arise from how changes are handled rather than from the changes themselves.

“The impact of the coronavirus pandemic means that providers are looking at their provision in a different light. There have been very significant challenges and many positive innovations over the past nine months and that is likely to lead to longer-term changes to which courses providers decide to offer and how and where they deliver them.

“We think it’s timely to share our learning from what we have seen, and hope that it will be helpful to providers, student representative bodies and others who support students in these circumstances.”

The report comes as the Institute for Fiscal Studies (IFS) warned of “significant funding shortfalls” in HE. While student numbers have held steadier than expected thus far, the IFS finds that a large-scale dropout and commensurate fall in income remains a distinct possibility. By far the biggest risk to institutional sustainability was the rising cost of servicing the Universities Superannuation Scheme (USS).


Read more: Donelan restates opposition to automatic tuition fee refunds

Related news: University ombudsman outlines plans for group complaints from students

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