Since early 2022, the Student Loans Company (SLC) and the Office for Students (OfS) have detected several instances of potential fraud and abuse at franchised providers. The Department for Education (DfE) involved the Government Internal Audit Agency (GIAA) in reviewing the regulatory landscape. GIAA aimed to provide independent assurance over the effectiveness of the system, including assessing whether students existed and attended courses.
GIAA looked at the interdependencies between OfS, SLC and DfE and whether systemic fraud risks were being recognised and mitigated. These bodies have been investigating where they may need to strengthen governance and oversight of funding associated with students at franchised providers. GIAA issued its report to DfE in August 2023, finding there were weaknesses in the control framework.
This report sets out where franchised providers sit within the higher education regulatory framework; outlines the risks to public funds; and makes recommendations to strengthen assurance. It does not review any specific cases of potential fraud or academic misconduct, nor does it seek to assess whether student loans, or the process through which they are issued, could provide better value for money.
In the first half of 2022, SLC’s data analysis detected instances of fraud, potentially associated with organised crime, involving franchised providers. Routine analysis by SLC detected suspicious patterns of activity involving franchised provider students across four lead providers. Further investigation by SLC raised concerns across a total of 10 lead providers.
