Universities across the UK have been accused of “mis-selling” courses to teenagers.
The public spending watchdog found that teenagers, who have little understanding of money matters and costs involved in University, were being mis-sold their course.
The watchdog highlighted how little regulation universities faced by comparing the higher education market to financial products.
With students in the UK now paying up to £9250 for a year at university, should there be more regulation into how universities work?
Shockingly, the average loan is expected to be around £50,000 by the time it is repaid.
The report states that a student loan is likely to be a person’s biggest loan after a mortgage – making it more of a long term commitment than teenagers are being told.
With only 32% of university students thinking that their course offers value for money – it is arguably a massive decision to expect a teenager of around 16 or 17 to make.
The long lasting impact these choices have can affect future employment and earning prospects the report also argues.
The Watchdog has argued that the Financial Conduct Authority requires companies to share all risks of products to potential customers, in a clear way.
However, for universities there are limited disclosure requirements, despite them selling a huge financial product to students.
Whilst it is arguably wrong for universities to be mis – selling courses to students, the report also notes that students do have statutory protections – including the fact that repayments are based on earnings and liability is written off after a certain amount of time.
With the government also stating that its student finance system has allowed people from disadvantaged backgrounds to enter higher education by removing the financial barriers.
With them also planning a review of tertiary education to check the system works for every one.