The government has announced a sweeping crackdown on fraud and poor-quality provision in England’s higher education franchise system, following concerns over rapid growth, weak

oversight and rising costs to taxpayers.

Education Secretary Bridget Phillipson confirmed on Tuesday that providers enrolling 300 or more students through franchise arrangements will be required to register with the Office for Students (OfS) by 2028/29. Those that fail to meet regulatory standards will lose access to student loan funding.

Franchising allows universities to subcontract teaching to colleges or private providers. Ministers say the model can widen access when well managed, but warn that years of unchecked expansion have left parts of the system vulnerable to exploitation. Government figures show fraud and poor practice cost the public purse £2 million in 2022/23.

Phillipson is writing to all institutions to set out the reforms and warn that low-quality or exploitative partnerships must be improved or shut down. She said “rogue operators” had treated students as a “route to fast cash,” adding: “If you use public money, you will be held accountable.”

The number of students taught through franchised arrangements has more than doubled over five years, with almost 60% studying at providers not directly overseen by the OfS. Students on these courses are statistically more likely to drop out and less likely to progress into work or further study. Only around three-quarters complete their courses, compared with nearly 90% across the wider sector.

Under the new measures, regulators will be able to issue fines or suspend registration where there is evidence of poor-quality provision, financial exploitation or fraud. The reforms target practices such as admitting students with very low English proficiency, accepting applicants with minimal attendance, or enrolling individuals primarily to access public funds.

The changes follow a government consultation on tightening HE franchising rules. Legislation enabling the reforms is due to be laid before Parliament in spring 2026. The measures will operate alongside tougher OfS registration conditions on governance, strengthened fraud controls and work by the Public Sector Fraud Authority.

Sector leaders broadly welcomed the move. Vivienne Stern, chief executive of Universities UK, said the steps would underpin “high and robust standards” and protect the sector’s global reputation. The OfS said it had long raised concerns about subcontracted provision and will publish its own consultation response in early 2026.

Ministers also plan future legislation to give the OfS additional powers to intervene quickly where quality or public funding is at risk. Photo by Malate269, Wikimedia commons.