For-profit universities have failed in the US, so why import them here?

Sally Hunt is the general secretary of the University and College Union (UCU)

In a letter to this morning’s Daily Telegraph, almost 500 academics warned against government plans to allow for-profit companies to play a bigger role in UK higher education.

The letter, signed by 471 leading academics, warned against giving for-profit companies substantial access to taxpayers’ money through publicly-subsidised loans and allowing companies, including private equity firms, to acquire struggling universities.

The signatories, which include myself, the vice-chancellor of the University of Salford Professor Martin Hall, two former principals of Oxford colleges Alan Ryan and David Marquand and 10 emeritus professors, say the government must learn from America where for-profit companies have been embroiled in scandals over the mis-selling of degrees.

One of the companies currently being investigated in America for deceiving students is Apollo, the parent company of the UK’s largest for-profit provider BPP University College, who are reported to have lobbied universities minister, David Willetts, to water down regulations and give them greater access to public funding.

They have already secured major concessions. The government has increased the maximum loan available for students at private universities from just over £3,000 to £6,000, in a move the David Willetts described as a step towards bringing in more private providers.

In the US, the Education Trust has calculated that only one in five students graduate from four-year degree courses at for-profit institutions, compared with 55 per cent at public community colleges.

For those who do finish, almost 20 per cent will default on their loan repayments within three years. That is around double the rate seen at public community colleges.

Perhaps one of the reasons for this is that the for-profits spend less on their students and their staff. A recent US Senate report revealed that the eight largest for-profit companies devoted an average of 50 per cent of their expenditure to education and 32 per cent on marketing. One company spent more on marketing than education.

People across the political spectrum care passionately about maintaining UK universities’ hard-won international reputation and there is clear opposition from the people that should matter most when it comes to government policy – the experts. The fact that so many eminent professors added their signature shows that those responsible for building our strong academic reputation have grave doubts about the government’s proposals.

The experience of for-profit universities in the US has been a disaster for the taxpayer with public subsidies soaring while completion rates have fallen. Ministers need to listen to those who say protecting the interests of students and securing academic standards are more important than acting as the laboratory for an experiment which risks harming our country’s reputation at home and abroad.

See also:

• Gove’s ‘for-profit’ free schools lust overlooks warning signs from US – Amelia Peterson, September 5th 2011

• Academic super-group are more like intellectual mercenaries – Kevin Meagher, June 7th 2011

• Coalition policy is a programme not for social mobility but for social engineering – Sally Hunt, June 1st 2011

• Coalition must reconsider privatisation of Higher Education before it’s too late – Sally Hunt, May 23rd 2011

• Willetts must learn from America’s mistakes over for-profit universities – Sally Hunt, May 6th 2011