England’s higher education regulator has warned of “serious risks to public money” in university franchise arrangements, with allegations that recruiters have faked language tests to get students on to courses without the minimum level of English. Research by the Office for Students (OfS) has raised multiple concerns about the growing enthusiasm for franchise partnerships in higher education, where a university contracts another organisation to teach all or part of a course on its behalf. Among them, the OfS reported that university staff managing partnerships were “incentivised” to prioritise student recruitment and retention above course quality, with allegations that some institutions lowered entry requirements to meet targets. There were also concerns that providers had received public funding for students who were not studying on the course their tuition fees covered. In other cases, the OfS said it had “seen, or received allegations of” students being encouraged to register for courses they had no intention of pursuing, to access maintenance loans. The briefing report highlighted multiple examples of concerning behaviour by recruitment agents. “Students have paid agents or other third parties to falsify English language tests, to allow them to enter courses without attaining the required standard of English,” the OfS said. Other students have had to pay “excessive” charges to recruitment agents as part of the application process. The OfS paper, published on Tuesday, also included reports of “widespread academic misconduct”, including allegations of delivery partners helping students to cheat by accessing essay mills or contract cheating services. Franchised provision is a big growth area in higher education, with students numbers doubling in the last three years to 138,000 and now accounting for more than 5% of all students in the sector. It offers an alternative route for disadvantaged and underrepresented students to access higher education and is a cheaper option for cash-strapped universities, but the OfS says it needs more robust governance and has promised to intervene if the interests of students or taxpayers are put at risk. “Without appropriate oversight of these arrangements, the arm’s-length nature of delivery presents significant risks to students, taxpayers and the higher education sector,” the OfS said. In February, the OfS launched an investigation into franchised provision at Leeds Trinity University after identifying potential concerns. “The decision to open an investigation does not mean that any form of non-compliance or wrongdoing has taken place,” it said at the time. David Smy, the deputy director for enabling regulation at the OfS, said: “In these financially challenging times for higher education providers, it’s more important than ever that they recognise that business models that rely heavily on subcontractual partnerships carry additional risks, and these risks must be effectively managed. “There are also serious risks to public money where these arrangements are not managed properly. Lead universities should seriously consider whether they should offer courses in this way if they cannot manage partners and public money effectively while ensuring that courses are delivering positive outcomes for students.” A spokesperson for Universities UK, which represents 142 institutions, said: “Universities are committed to offering high quality higher education. Franchised provision is one way in which universities are doing this. Franchised provision plays an important role in supporting growth and opportunity. “However, we are not complacent about the concerns raised recently and we have in place our own franchise governance framework which promotes greater controls in the management of franchised provision.” The National Audit Office has previously said that loan fraud among franchise students accounted for more than half of the student loan fraud uncovered in 2023.