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Government shelves higher education privatisation plans

24 January 2012

UCU today welcomed reports that American-style government plans to allow private for-profit companies access to publicly-subsidised student loans have been shelved.

UCU said, if true, then the reports were to be welcomed. However, the union added that it would remain vigilant and oppose any efforts to introduce privatisation or allow companies to acquire universities without proper legislation.
 
This morning's Daily Telegraph reports that the plans, originally expected to feature in a forthcoming higher education bill, have been shelved until at least 2015. The union has been leading the campaign against government's proposals and said it was pleased that the government appeared to have listened to the concerns of the academic community.
 
Last month 500 leading academics wrote to the Daily Telegraph calling on the government to scrap the plans. In the United States, the higher education system the Government was seeking 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.
 
US private companies recruit just 10 per cent of students, but they consume 25 per cent of government-backed loans. The union said allowing 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.
 
This morning's reports suggest that the Liberal Democrats in the coalition were particularly unhappy with the proposals. Half of Liberal Democrat backbenchers had voiced their concerns about the issue through an early day motion opposing the plans.
 
UCU general secretary, Sally Hunt, said, 'Plans to allow private companies greater access to taxpayers' money would have seen them getting rich at the expense of the UK taxpayer. In the US for-profit universities and colleges have been investigated for the mis-selling of qualifications to vulnerable students and their families. That is the last thing we needed here as students struggle to adapt to the new fees regime.
 
'The government should be applauded to appearing to listen to the experts in the case. We will continue to expose the dangers of allowing those whose first priority is to their shareholders a greater hold on our higher education system.'
 
The Daily Telegraph story can be found at http://tinyurl.com/84o4vdx
Last updated: 11 December 2015

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