More than 22,000 students from 15 universities and colleges across England have been instructed to repay their maintenance loans as part of a government crackdown on franchise university courses. The affected students recently received official letters revealing that the courses they enrolled in were never eligible for maintenance loans or childcare grants.
This enforcement comes as part of the Labour Party government’s efforts to address the misuse of taxpayer funds through franchise courses, which have enabled students to claim substantial taxpayer-funded loans and grants, often for weekend-based study programs.
Franchise providers had incorrectly classified their courses as ‘in attendance,’ a status that allowed students to access loans and grants totaling approximately £190 million annually. These courses included in-person weekend teaching sessions, supplemented by some with online learning components during weekdays.
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Education Secretary Bridget Phillipson condemned the practice, stating that certain organizations exploited the student loan system as a “loophole to abuse public money.” She emphasized the government’s unwavering commitment to cracking down on such franchising arrangements that fail students and misuse public funds.
Phillipson remarked: “This is not students' fault. Many organizations have failed their students through incompetence or deliberate abuse of the system. Some lack the governance and oversight required to follow clear guidance, while others intentionally exploit this loophole. This behavior falls short of the standards expected from our prestigious university sector.”
She further called on universities to act swiftly to assist students who may experience financial hardships due to these repayment demands.
NUS President Amira Campbell voiced concern over the impact on students, many of whom are from working-class backgrounds and juggle studies with parenthood. Campbell highlighted the broken trust between students, universities, and the government, warning that these changes risk plunging thousands into poverty.
Campbell stated: “Students trust the government, the Student Loans Company, and their universities to manage finances correctly. Now, repeatedly, students bear the consequences of systemic mistakes. The removal of childcare grants and retroactive changes to loan terms threaten the futures of students striving to improve their lives while managing family responsibilities.”
Affected institutions include London Metropolitan University, Bath Spa University, Leeds Trinity University, Southampton Solent University, and Oxford Brookes University, among others.