Widespread student loans fraud exposed

Extensive fraud in Britain’s student loan system has been uncovered by a BBC Panorama investigation, prompting calls for a police inquiry to examine the full scale of the problem.

The Panorama expose, which aired last night, was the culmination of ten months spent investigating dishonest education agents and bogus who commit fraud by targeting public colleges offering courses approved for student loans.

Acting on a tip-off, the BBC secretly filmed agents offering to get applicants admitted into government-approved private colleges by supplying fake documents and qualifications for a £200 fee.

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“About £400m-a-year is received by 112 private colleges through the student loan system,” says the BBC, with students on government-approved courses at private colleges in England, Wales and Northern Ireland entitled to as much as £11,000 in maintenance loans to cover living expenses.

The investigation prompted calls from the chair of Parliament’s spending watchdog, the Public Accounts Committee, Meg Hillier for a police inquiry. The National Union of Students also called for Panorama’s findings to be referred to the police.

The revelations “come at a time of massive change” for the UK’s higher education system. The government is looking at whether new businesses could offer degrees on a probationary basis, “which could attract interest from companies operating elsewhere in the world”, says the BBC’s education editor Branwen Jeffreys.

“The prize, insist ministers, is the chance of fresh thinking, more short degree courses, better value for money,” she says. “The jeopardy is the risk of abuse of a taxpayer backed student finance system.”

It is the second scandal to hit the student loan system in a week after the chief executive of the Student Loans Company, Steve Lamey, was sacked following a long-running investigation into his conduct.