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Written Evidence submitted by Office of the Independent Adjudicator for Higher Education (HEF0062)
Education Committee
Higher Education and Funding: Threat of Insolvency and International Students
The Office of the Independent Adjudicator for Higher Education (OIA) has a perspective on international students and provider insolvency protections both as the independent student complaints review body and as part of the regulatory framework for higher education in England and Wales.
Under the Higher Education Act 2004 (as amended by subsequent legislation), a diverse range of higher education providers are covered by the OIA Scheme. Our membership of around 850 providers includes industry - specific independent providers, initial teacher training providers, further education colleges and universities across England and Wales.
Higher education students in England and Wales can complain to the OIA about their provider. The OIA has a wide remit to consider complaints from students about any "act or omission" of a member provider. This includes complaints about service quality, course provision, academic appeals, placements, disciplinary and fitness to practise procedures, and accommodation that is owned or managed by the higher education provider.
Whilst we are not best placed to comment specifically on the impact of Government policies on the stability of providers, our casework shows that international students often experience additional disadvantages in closure scenarios (for example concerns about visas and difficulty relocating) and additional costs, which amplify the impact caused by provider closure.
International students continue to be over-represented in the complaints that we receive[1], in particular where changes in policy are implemented quickly, and when those providing advice are not clear about the impact of the changes. Providers have a responsibility to the Home Office as a licensed sponsor as well as to the student to ensure there is clear communication of any changes, and balancing these responsibilities can be difficult, at times leading to mistakes or unfair treatment, with significant consequences for affected students.
International students continue to place a high value on the opportunity to study in the UK and the opportunity to work here following the successful completion of their studies. The financial and personal costs to international students of not completing their studies successfully can be very high.
We are also aware that a revocation or suspension of a provider’s license due to breaches of the new Basic Compliance Assessment (BCA) metrics could cause a provider to become insolvent and force a closure. Given the current lack of safeguards for students in this scenario, this would be a disastrous situation for both home and international students.
There is currently no dedicated insolvency regime for higher education institutions in England and Wales and the position for some types of provider is unclear.
Most traditional providers are Royal Charter Institutions or Higher Education Corporations. It is very unclear what would happen if a Royal Charter Institution or Higher Education Corporation were to get into extreme financial distress. They would likely be treated as an unregistered company and therefore the only available insolvency regime may be liquidation, losing the opportunity for a period of teach out (where teaching continues to allow current students to complete their studies). It is unclear whether any processes put in place via a market exit plan, student protection direction from the OfS or any other instruction from a regulator would be followed since a liquidator isn’t bound by them. The only duty is to wind-down the organisation, for the benefit of its creditors which is likely to be in direct conflict with the interests of students.
For providers that are companies, insolvency is managed through general corporate or charity law, depending on a provider's legal structure and they are likely to be covered by the Companies Act 2006 in the event of financial failure. In some circumstances a provider could enter administration. The purposes of administration are to rescue the company as a going concern; achieve a better result for the company as a whole than would be likely if the company were wound up (without first being in administration); or realise property to make a distribution to one or more secured or preferential creditors. However, this process does not necessarily offer much in the way of student protection.
We have seen some examples of this inconsistency impacting students. When GSM London (GSM) closed in 2019, because it was a private company able to enter administration, teaching continued until the end of the semester, allowing students to complete their credits. In contrast, the Academy of Live and Recorded Arts (ALRA) in 2022 went directly into compulsory liquidation, with immediate closure and restricted access to premises for staff and students. In our view, students would have benefited from a more appropriate administration regime enabling the provider to perhaps complete teach out and prioritise students’ interests[2].
We believe this uncertainty could lead to unfairness to students who would not be treated equally in the same situation. This also creates challenges in coordinating orderly closures that protect students. We have written about the different structures and their implications.[3]
Current regulatory protections include Student Protection Plans (SPPs), which should outline arrangements for course continuity or transfer and Student Protection Directions (SPDs) imposed by the Office for Students (OfS) when there is a material risk of market exit. In our experience this is most effective alongside voluntary coordinated action from within the sector to support affected students. However, our recent report (July 2025) with SUMS Consulting – “Putting students first: Managing the impact of higher education provider closure”[4] - shows that implementation is inconsistent, and there is no statutory framework to ensure the preservation of students records or work or financial redress.
Our casework shows that in practice, students often report a lack of meaningful options or clear communication as well as substantial distress and financial loss. We have published our concerns about lack of protection for students[5] and our experience of the closure of GSM where we documented the experience of students who complained to us as well as some wider learning[6].
The absence of a clear, student-focused insolvency framework has led to inconsistent and reactive responses when providers close. Change is needed particularly where an administration process is not an option. This is the case where providers are created by Royal Charter or are a Higher Education Corporation, or for companies where administration is not deemed viable by an Insolvency Practitioner (as was the case with ALRA). There needs to be a process which prioritises students and allows time, without immediate creditor action, regardless of corporate structure, to enable an orderly transfer or teach out of students and put in place meaningful remedies prior to an orderly wind down. In our experience, students at all providers, especially where OfS registered and receiving student loan finance, expect a high level of protection, intervention and outcome when their provider closes.
There are several relevant Recommendations in our recent report with SUMS Consulting.6 These include:
a) Initially, this could involve making a legal change to ensure all providers can enter into an administration regime (rather than liquidation) including those created by Royal Charter.
b) Ideally, this would involve arrangements for higher education providers to have structured and orderly closure that allows a pause in insolvency and sufficient time to consider and protect students’ interests.
These safeguards would not be perfect or straightforward but would provide a better framework and consistency for student protection.
Our published reflections show some of the consequences for students. However, these have all been comparatively small providers with a structure where the processes are relatively well established and understood. While the consequences of a large-scale traditional institution becoming insolvent are largely unknown, our experience suggests the likely impacts would include:
The cases we received after the closure of GSM7 illustrated significant distress, often worsened by inadequate communication and unclear refund mechanisms.
Our experience in resolving student complaints during provider and course closures suggests that the current system lacks the legal and operational infrastructure needed to protect students - particularly international students and those with caring responsibilities - from the consequences of institutional financial failure. We support a stronger, consistent insolvency framework alongside supporting regulation that prioritises all students’ interests, ensures continuity of study for all, and provides accessible financial support where closures occur.
September 2025
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[1] Introduction to the Annual Report for 2024 - OIAHE
[2] How corporate structure impacts provider closures - OIAHE
[3] How corporate structure impacts provider closures - OIAHE
[4] Putting students first: Managing the impact of higher education provider closure - OIAHE
[5] Protecting students in the event of an unplanned provider closure | Wonkhe