Students taking out huge loans to pay for higher education are being failed by universities in England, with only one in three saying they receive value for money according to a stinging new report by the government’s spending watchdog.
Amyas Morse, the head of the National Audit Office (NAO), said that if universities were banks they would be investigated for mis-selling.
The sector is already facing questions over extravagant pay for vice-chancellors.
The NAO said the Department for Education (DfE) needs to do more to help “vulnerable” students make better choices about courses. It has called on the DfE to provide more aggressive oversight to ensure value for money.
Morse said: “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 [DfE] is taking action to address some of these issues, but there is a lot that remains to be done.”
The NAO found that the increased numbers of disadvantaged students now attending universities were mainly going to lower-ranked institutions – “which risks creating a two-tier system”, dividing those from rich and poor backgrounds.
Meg Hillier, the Labour MP who chairs parliament’s public accounts committee, has accused the DfE of taking a “hands-off” approach that has left students floundering with £9,250 annual tuition fees and debts totalling £50,000 on average.
“The government is failing to give inexperienced young people the advice and protection they need when making one of the biggest financial decisions of their lives,” she said.
“It has created a generation of students hit by massive debts, many of whom doubt their degree is worth the money paid for it.”