Oxford Business College Faces Funding Freeze After Government Investigation into Recruitment Practices and Loan Abuse Allegations

The Department for Education has withdrawn student loan funding from Oxford Business College (OBC) following a comprehensive government investigation triggered by serious concerns regarding its admissions practices, alleged student loan fraud, and the management of recruitment and attendance. Secretary of State for Education, Bridget Phillipson, announced the decision in a written ministerial statement, citing ‘credible concerns’ about the college’s operations, which are not itself a university but offers courses through partnerships with registered English universities – including the University of West London, Buckinghamshire New University, and New College Durham.

The investigation, conducted by the Government Internal Audit Agency (GIAA), focused on whether students were genuinely enrolled in courses to gain access to student loans without any intention of completing their studies or repaying the funds. Key findings highlighted deficiencies in the college’s assessment processes for prior attainment – particularly English language proficiency – and a lack of adequate monitoring of student attendance. Phillipson stated that the investigation could not provide assurance that students were being adequately assessed before enrolment, nor that their course engagement was reliably monitored.

The situation is further complicated by the ‘franchised’ provision of higher education courses, where registered universities allow unaccredited institutions to deliver some of their curriculum. Under this system, student loan payments are initially made to the originating university and then a percentage is passed on to the smaller institution delivering the teaching. Students also access maintenance loans directly into their bank accounts. The Sunday Times recently reported evidence suggesting individuals were enrolling solely for access to these loans, with no intention of repayment—a practice described by Phillipson as ‘one of the biggest financial scandals in the history of our universities sector.’ The report indicated a potential focus on organized recruitment efforts, particularly involving Romanian nationals.

Phillipson has commissioned counter-fraud experts to lead a deeper investigation into these alleged fraudulent activities. As a result of the concerns identified, OBC will no longer be eligible for new student loan applications starting September 2025. Existing students will have until the end of the current academic year to transfer to alternative courses and retain their existing maintenance and tuition fee support if they maintain active engagement with their studies. However, the Department for Education is challenging OBC’s decision, arguing that it is unlawful and intends to pursue judicial review. Oxford Business College maintains its innocence and asserts that the DfE’s actions are disproportionate and unfounded. The college continues to prioritize the interests of its students, offering transfer options to ensure a smooth transition.

The Department for Education currently provides courses through five registered institutions via OBC, with several of these partners having already terminated their agreements or implemented stricter controls.