Course provider closure during studies

Overview

If your university, college or course provider closes while you are part-way through your studies, you are not simply left with nothing. There is a framework of protections designed to help you either finish your qualification or be put back into the position you would have been in. The strength of those protections depends heavily on the type of provider, how it closes (in an orderly planned way or a sudden disorderly collapse), and the contract you have with it.

The key point is that closure is treated partly as a regulatory matter, partly as a consumer contract matter, and partly as a student finance matter. These three strands overlap, and the practical outcome usually turns on which regulator oversees your provider and what commitments the provider made to you.

The regulatory framework

Most higher education providers in England are registered with the Office for Students (OfS). Registered providers are required to have a student protection plan. This is a published document setting out what will happen to students if the provider, a campus, or a particular course closes. It should explain the risks to continuation of study and the measures in place to protect students, such as teach-out arrangements, transfer to another provider, or refunds and compensation.

You should read your provider’s student protection plan now if you are concerned, because it is the document the OfS expects the provider to honour. In the event of closure the OfS expects providers to communicate early and clearly, to follow the plan or make clear any changes to it, and to comply with consumer protection law.

Where the OfS considers a registered provider is at material risk of closing, it can impose a student protection direction under its ongoing conditions of registration. This lets it direct the provider to make and implement detailed plans to protect students. The OfS is most likely to use this power where there is a material risk to the provider continuing over the next twelve months. Its stated aim is to prevent a disorderly exit, meaning an unplanned closure mid-year without arrangements in place.

It is important to be realistic. The OfS protects the interests of students as a body, but it does not guarantee that any individual student will be bailed out, and it does not itself pay compensation. It is not a rescue fund. Its role is to reduce harm and hold the provider to its obligations.

Teach-out and transfer

In an orderly closure the most common outcomes are teach-out or transfer.

Teach-out means the provider continues to run your course until existing students have finished, even though it is not taking new students. This is usually the least disruptive outcome because you complete the same qualification with the same institution.

Transfer means arrangements are made for you to continue your studies at another provider, ideally on a comparable course so you can carry across the credits you have already earned. Practical issues here include whether the receiving provider recognises your existing credits, whether the location and mode of study suit you, and whether any fee differences are covered.

If neither is possible, the fallback is usually financial: refunds of fees and, in some cases, compensation for wasted costs and disruption.

Your contract and consumer rights

Your relationship with your provider is contractual, and the Consumer Rights Act 2015 generally applies to students as consumers. That means services should be provided with reasonable care and skill and in line with what you were told when you enrolled. Prospectuses, offer letters, terms and conditions, and key information you relied on can all form part of what the provider promised.

If the provider fails to deliver the course you contracted for, you may have claims for breach of contract, including a refund of fees paid for teaching you will not receive and potentially damages for other losses that flow from the closure. The Competition and Markets Authority has published guidance making clear that consumer protection law applies to higher education providers and their dealings with students.

Look closely at the terms and conditions and any refund and compensation policy. A term that tries to exclude all liability if the provider closes may itself be challengeable as unfair under consumer law, so do not assume a restrictive clause is automatically enforceable.

Student finance implications

If you have tuition fee and maintenance loans from Student Finance England, closure has consequences for your loan account. Generally you remain liable to repay amounts already paid out to you as maintenance, but tuition fee loan payments are tied to your registration on the course. Where a course stops, you should contact Student Finance England promptly to sort out your funding position and to protect your future entitlement, because your eligibility for funding on a replacement course can be affected by how much funding you have already used. This is often one of the most important practical issues, because a further year of study elsewhere may require funding you thought you had already committed.

If you paid fees privately rather than through a loan, you are pursuing a refund directly under your contract with the provider.

If the provider becomes insolvent

A sudden financial collapse is more difficult than a planned closure. If the provider goes into insolvency, you become an unsecured creditor for any refund owed, which means you may recover little or nothing of money already paid. This is why the regulatory emphasis is on preventing disorderly exits and arranging teach-out or transfer before insolvency, and why the practical value of a refund clause depends on the provider actually having money to pay it.

If your provider is a company, check whether it is part of a larger group, because that can affect who is liable and whether there are related entities able to continue provision.

Different types of provider

The protections above are strongest for providers registered with the OfS. If you are studying with a private training provider, a further education college, or an unregistered provider, the position can be different.

Further education and sixth form colleges are subject to their own oversight and, in England, there are arrangements intended to protect learners if a college fails. Private and unregulated providers may offer far weaker protection, and your main recourse may be your contract alone. Apprenticeships and courses funded through other routes have their own continuity arrangements. If your course leads to a professional qualification, the relevant professional body may also have arrangements to help students complete accreditation.

Tell me which type of provider you are with and I can be more specific.

Complaints and the OIA

If you are unhappy with how your provider handles the closure, you should first use the provider’s internal complaints procedure. For higher education students in England and Wales, once you have exhausted the internal process and received a Completion of Procedures letter, you can usually take an unresolved complaint to the Office of the Independent Adjudicator for Higher Education (OIA). The OIA can look at whether the provider acted reasonably and in line with its own policies, and it can recommend remedies including refunds and compensation. The OIA is free to use and is generally a better first port of call than court because it avoids cost and litigation risk.

The OIA does not cover every provider, so check whether your provider is a member. If it is not, or if your losses are large and clearly quantifiable, a claim in the county court for breach of contract may be an option, but weigh this against cost, delay and the risk that an insolvent provider cannot pay.

Practical next steps

1. Find and read your provider’s student protection plan and your enrolment terms and conditions, including any refund and compensation policy.

2. Keep every document and communication: your offer letter, prospectus pages you relied on, fee receipts, and all messages from the provider about the closure.

3. Ask the provider in writing exactly what teach-out or transfer arrangements it is offering, and by when, and what it will do about fees you have paid.

4. Contact Student Finance England to protect your loan and funding position before committing to any replacement course.

5. If you are offered a transfer, check that your existing credits will be recognised and that fees, location and mode of study work for you before agreeing.

6. If the provider’s response is inadequate, use its formal complaints procedure, obtain a Completion of Procedures letter, and then consider the OIA.

7. Take advice from your students’ union or an adviser at the receiving institution, who often have direct experience of managing closures and transfers.

Key facts that would change the answer

The right analysis depends on several things you have not yet told me: whether your provider is registered with the OfS, whether it is a university, further education college or private provider, whether the closure is planned or an insolvency, whether it is the whole institution or just your course or campus, how you are funding your studies, and how far through your course you are. If you tell me these details I can give you a much more precise answer about your options and likely outcomes.