England’s biggest for-profit college, GSM London, has announced that it has entered into administration and will stop teaching at the end of September, meaning current students will have to find alternative institutions.
GSM, which is ultimately owned by private equity firm Sovereign Capital and awarded degrees validated by the University of Plymouth, had been awaiting a decision from the Office for Students on whether it would be included on the regulator’s register of providers. Exclusion from the register of providers would have meant GSM – which has experienced serious financial problems in recent years – losing access to publicly funded student loans for its students.
It is thought that the OfS had concerns about the level of dropout rates at GSM and its financial position.
Now, its current students will need to find alternative institutions to continue their studies.
GSM had 4,587 students with Student Loans Company funding in 2017-18.
Via student tuition fees, ?152?million of public money went into GSM London in the six years to 2017-18, SLC figures show.
GSM says in a published on its website on 31?July: “The administrators are working with GSM to enable all tuition, classes and exams to continue as planned for this semester, in accordance with the published timetable. Teaching services will cease at both the Greenwich and Greenford campuses at the end of the current semester, which is due to conclude at the end of September?2019.
“Our students will be supported as far as possible while efforts are made to provide them with informed options for where they may be able to continue their studies beyond the end of the current teaching semester. Discussions are already under way with other higher education providers to identify options, and information, advice and guidance will be provided to students as soon as the details have been finalised.”
The statement continues: “GSM and the administrators are engaged in proactive discussions with GSM’s validating partner, the University of Plymouth, as well as the Department for Education and the Office for Students, to implement a protection plan for all students. The Student Loans Company, Ucas, and the Office of the Independent Adjudicator are also supporting these plans. This student protection plan is focused on minimising any disruption to students’ studies.
“As operations at GSM will eventually be brought to a close, all roles within GSM are at risk of redundancy. Staff have been informed and a consultation process is under way. 274 jobs will be affected.
“GSM has had capital injections totalling some ?22?million since the end of 2016 but, despite that, due to highly challenging market conditions, the college has not been able to recruit and retain sufficient numbers of students to generate enough revenue to be sustainable.
“Within this context, in spring 2019 the GSM board took the decision to seek a new owner to ensure the college’s longer-term future through an intensive sales process. Unfortunately, a sale of GSM was not possible to achieve and, given the board’s concerns over the future viability of the college, it became necessary to seek the protection afforded by a formal insolvency procedure.
“As a result, the GSM board resolved to appoint administrators to GSM in order to provide a suitable framework to ensure, as far as possible, that all teaching obligations could be fulfilled until the end of the current semester and appropriate support provided to students to find alternative study options before the orderly wind-down and closure of the college.”
An OfS spokesman said: “We understand that this news will be worrying for the students and staff at GSM. As the Office for Students, our overarching priority is to ensure that students are able to complete their studies. We understand that some students who are nearing the end of their studies will be able to stay at GSM, but it is likely that most will need to transfer to another higher education provider.
“While GSM are not registered with the OfS, and not therefore subject to our regulation, we recognise the importance of supporting GSM’s students at this time. We are, therefore, working with the Department for Education and partners across the higher education sector to ensure that students are supported and are able to make informed choices about the options that are available to them to transfer and continue their studies, or receive appropriate recognition for their academic achievements to date.”