Higher Education for Profit

I’m proud to be one of the 500 signatories on this letter in today’s Telegraph, urging that the Coalition’s plans to aggressively open up Higher Education to private providers be scrapped. The text of the letter is as follows:

SIR – We are deeply concerned about the Government’s proposals for higher education, which would give private, for-profit companies substantial access to publicly subsidised loans and would allow companies, including private equity firms, to acquire struggling universities.

The record of private equity firms in delivering public services is exemplified by the recent debacle at Southern Cross. In the United States (the higher education system the Government is now trying to emulate), the private sector is well established, with students and taxpayers suffering the consequences.

For-profit companies offer derisory graduation rates, crushing levels of debts and degrees of dubious value. According to the US Education Trust, only 20 per cent of students at for-profit colleges complete a four-year course and the same proportion of those who do finish default on their loans within three years.

American companies recruit just 10 per cent of students, but consume 25 per cent of government-backed loans. To allow institutions driven by the pursuit of short-term shareholder value to get a foothold in higher education will be to condemn generations of students to a similar future, while the taxpayer will pick up the cost.