Investigators specializing in fraud will be examining the university loans system due to concerns that students are falsifying claims to obtain millions in loans without any intention of studying. The education secretary, Bridget Phillipson, has ordered the Public Sector Fraud Authority to address allegations that individuals with no genuine interest in education are enrolling in degree programs solely to secure loans.
The first report of these claims came from an investigation conducted by the Sunday Times, which reviewed financial documents and interviewed sources from the Student Loans Company, the Department for Education, the Office for Students, and university lecturers. The newspaper found that most students under suspicion are associated with “franchised universities,” which are colleges providing courses on behalf of established universities.
Phillipson referred to the revelations as one of the most significant financial scandals in the history of the universities sector and has instructed immediate action to protect public funds. She contended that the previous Conservative government’s expansion of franchised education in 2016, without addressing the underlying financial vulnerabilities, is responsible for the widespread abuse.
The Student Loans Company is collaborating with law enforcement agencies to investigate complaints regarding some Romanian students at various institutions. It has been noted that not sufficient measures were taken to connect incidents of broader abuse across the system and to take decisive action to halt it.
Despite the Office for Students (OfS) being established to ensure university quality and prevent fraud, Phillipson argued that it was directed by the Conservatives to focus on so-called “culture wars” in universities rather than addressing fraud.
Phillipson has pledged to introduce new legislation to equip the OfS with stronger powers to intervene promptly and safeguard public funds.
A spokesperson for the Department for Education emphasized that the plans for reform will restore confidence in universities. They affirmed that steps have already been taken to tackle fraudulent franchise operators and promised further actions to strengthen regulation, with the OfS considering franchising a priority. The spokesperson also stated that the education secretary has requested the Public Sector Fraud Authority’s assistance in managing the government’s response to these claims.
Susan Lapworth, the chief executive of the OfS, condemned the alleged fraudulent practices as an outrageous misuse of public funding that undermined the educational experience of genuine students.
Source: https://www.theguardian.com/education/2025/mar/23/education-secretary-orders-inquiry-into-allegations-of-student-loan
