Universities slammed for ‘mis-selling’ poor value courses

8 December 2017

Universities have been challenged by the National Audit Office (NAO) for potentially mis-selling poor value higher education degrees.

The NAO, says that “if higher education was a regulated financial market we would be raising the question of mis-selling”.

It believes there is a lack of any “meaningful price competition”, with the top 90 institutions all charging the maximum fee allowed of £9,000 per year in 2016/17.

This lack of competition is coupled with “weak” market incentives for higher education providers to compete for students on course quality.   

The public spending scrutiny body says that just one in three (32%) students think their university courses represent value for money, and adds that students can do little to influence quality once on a course.  As a result, prospective students are “in a potentially vulnerable position” when it comes to deciding whether to enter higher education and take out a student loan, according to the NAO. While most graduates do go on to earn higher wages than non-graduates, some higher education leavers don’t outperform their peers with less education.

With average student debt now around £50,000 at graduation, this leaves questions as to whether it is worthwhile for some to go to university at all.

‘The higher education market has several points of failure’

The NAO is now calling on the Department for Education to address the “deficiencies” it’s highlighted using proposed regulatory reforms.

Amyas Morse, head of the National Audit Office, comments: “We are deliberately thinking of higher education as a market, and as a market, it has a number of points of failure. Young people are taking out substantial loans to pay for courses without much effective help and advice, and the institutions concerned are under very little competitive pressure to provide best value.

“If this was a regulated financial market we would be raising the question of mis-selling. The Department is taking action to address some of these issues, but there is a lot that remains to be done

A Department for Education spokesperson responds: “Our student finance system removes financial barriers for those hoping to go university, with outstanding debt written off after 30 years.  We recently announced that the repayment threshold will increase from £21,000 to £25,000, putting more money in the pockets of graduates. We will also be conducting a major review of funding across tertiary education to ensure a joined-up system that works for everyone.

“Our reforms, embodied by the Higher Education and Research Act, are helping students make more informed choices about where and what to study, ensuring they get good value for money.

“Disadvantaged 18-year-olds are more likely than ever before to go into full-time higher education, including record entry rates at the most selective universities. The new regulator, the Office for Students, will go even further to improve access and participation.”


In reply to by anonymous_stub (not verified)

all those that come out of uni with a totally useless degree then end up in a job they could have got straight from school at 16. still it sounds good at dinner parties when parents like to brag about their little jimmy at uni, what a sad world we now live in.

In reply to by anonymous_stub (not verified)

Is there a choice as to whether a degree is necessary or not? It seems that many jobs are only available if you have a degree. This puts potential students in the position of having to borrow to get the employment/career they want.This means that substantial borrowing is forced upon school leavers by the university/ employer relationship.Who persuaded employers that they must have degree level employees in the first place I wonder?

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