Student protection directions

We are currently consulting on a new approach to enable us to intervene more quickly and in a targeted way when we consider that a provider is at material risk of leaving the higher education sector.

We are seeking views on proposals to create a new general ongoing condition of registration that would apply to providers that are not Further Education Bodies, as a permanent amendment to the OfS’s regulatory framework. We consider the proposals necessary to ensure students have the necessary protections where there is material risk of a higher education provider exiting the market.

The proposals relate to ‘market exit’ cases which occur as a routine part of the operation of the sector but may be more likely than normal as a result of the impact of the coronavirus (Covid-19) pandemic. We are therefore consulting now because the risk to students arising from market exit cases is currently increased, but we would have consulted on these proposals in any case to ensure that we can protect the interests of students as a matter of routine.

Read the proposals and respond

No – providers that are Further Education Bodies (as defined by the Technical and Further Education Act 2017) would not be subject to this condition of registration.

This is because these providers may be covered by the Special Administration Regime in the FE sector, and therefore their students could be protected by those measures in the event of a likely market exit.

Subject to the OfS’s consideration of the responses to this consultation, we have proposed that this condition would come into force later this year.

The existing student protection plan requirements are underpinned by a provider’s own assessment of the risk of various student protection events occurring and the measures necessary to mitigate the impact of those risks on students’ continuation of study. Our experience is that a provider’s assessment of the risk of market exit does not always reflect the OfS’s assessment, and such situations can escalate quickly requiring immediate action that a provider may be unable or unwilling to take. This can result in prolonged engagement with a provider before adequate steps are taken to protect students.

We are also mindful of the need to target regulation where it is most needed. The proposals relate specifically and only to providers that the OfS judges to be at material risk of market exit and the regulatory burden associated with the condition would not, therefore, apply to other providers. In addition, the proposals do not apply to further education colleges and sixth form colleges that are subject to the special administration regime in place for further education, even though those providers are subject to the existing provisions for student protection plans.

The approval of a student protection plan under condition C3 triggers an automatic requirement for that plan to be published. Providers at material risk of market exit have expressed concerns about the consequences of this publication requirement and this is hindering our ability to ensure that detailed planning takes place in a timely way because a provider may prefer to delay publicly setting out student protection measures that suggest an exit is likely. The proposals would allow the OfS to require publication of a market exit plan when it considered it likely that a provider will exit the sector.

No – these proposals relate to providers the OfS considers to be at material risk of market exit. Where providers seek to make other changes (for example closing courses or campuses) these are covered by the existing student protection plan arrangements (as required by condition C3 of the OfS’s regulatory framework).

In the current context of the coronavirus pandemic, we have signalled that these student protection plan arrangements still apply, and we expect providers to apply the spirit of those plans to any changes they have made at this time.

Market exit cases are a routine feature of the higher education landscape so we consider these proposals to be necessary regardless of the impact of the coronavirus pandemic on providers. Over recent months we have been monitoring closely the impact of the pandemic on English higher education providers and are requiring providers to report any new short-term financial issues. The full extent of the disruption caused by coronavirus cannot be predicted and it is too soon to understand the financial impact it may have on providers. We are therefore bringing forward proposals relating to market exit now to ensure that we are able to protect students from the consequences of disorderly market exit.

Market exit cases are a routine feature of the higher education landscape so we consider these proposals to be necessary regardless of the impact of the coronavirus pandemic on providers. We had already signalled that we would bring forward proposals in 2019-20 on student protection arrangements, and these would have related to permanent regulatory requirements. While we have paused other consultation activity, we consider that it is necessary to bring forward the current proposals because of the increased risk to students as a result of the disruption caused by the pandemic. We expect to consider whether further proposals related to student protection arrangements are necessary in due course.

Published 17 July 2020

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