Private university expansion plans a 'risk too far'
The government's plans to expand private providers in the UK's university sector are a "risk too far", a report from the Higher Education Policy Institute has warned.
The cost of student finance for these "alternative providers" quadrupled in four years to £382m, says the study.
The report warns against a "high-speed" process of allowing new providers to award their own degrees.
The Department for Education says the plans will give students "more choice".
But the report co-author Robin Middlehurst said the experience of the United States showed "overly generous rules for alternative providers are a magnet for questionable business practices".
"Better protection of the public purse is overdue, especially given the growth in the number of for-profit providers," said Prof Middlehurst.
'Bed of nails'
The Higher Education and Research Bill, currently before Parliament, proposes a combined system for regulating traditional universities and so-called "alternative providers", with the aim of encouraging a wider market for students.
There are more than 700 alternative providers, with almost 300,000 students - including for-profit colleges offering below degree-level courses, overseas-based colleges as well as well-regarded private institutions providing their own degree-level courses.
More than 120 of these providers run courses eligible for student finance, with the cost of tuition fee loans and maintenance loans to this sector rising from £94m to £382m between 2010-11 and 2014-15.
But creating a common set of rules for established universities and a wave of newcomers could turn into a "bed of nails", said the report co-author, John Fielden.
The report warns that more than two-thirds of alternative providers could still remain outside of the regulations.
The study highlights the experience in the US, which saw a rapid expansion in for-profit higher education colleges, raising concerns about recruitment tactics, dropout rates and access to student finance support.
There have been repeated warnings in the UK about the need to safeguard public funding.
The Public Accounts Committee warned last year that the government had ignored "repeated warnings" about the financial risks of alternative providers expanding "without sufficient regulation".
There had been previous warnings from the National Audit Office of millions of pounds being lost to students who were not really eligible, high dropout rates and inadequate systems for recording students.
But Alex Proudfoot of Independent Higher Education said: "The greatest risk to UK higher education is not independent providers but stagnation in the face of a rapidly changing world.
"Independent providers have proliferated as students continue to choose modern, innovative and industry-led provision," said Mr Proudfoot.
The government's higher education plans are intended to give more consumer choice for students, who in England are facing tuition fees that will rise this autumn to £9,250.
But Lord Patten, chancellor of Oxford University and former Conservative party chairman, has criticised "ham-fisted" plans to create an over-arching regulator, the Office for Students, as a threat to university independence and integrity.
There have also been concerns about plans to grade universities as gold, silver or bronze in terms of teaching quality - with warnings about the impact that this could have on the recruitment of students for those at the bottom.
Nick Hillman, director of the Higher Education Policy Institute, said "all higher education institutions were new entrants once" and alternative providers could offer more flexible opportunities for students.
"But, as the higher education market continues to change shape, we must be vigilant in ensuring bad apples do not contaminate the sector as a whole."
The UCU lecturers' union general secretary, Sally Hunt, said the report should "sound alarm bells in government".
A Department for Education spokeswoman said: "More alternative providers than ever will be regulated thanks to the reforms being introduced through our Higher Education and Research Bill.
"As well as regulating all those receiving public funding, the Office for Students will have the ability to regulate alternative providers outside of public funding.
"The bill, which is currently going through Parliament, will build a higher education system that offers students high quality teaching, more choice and greater competition."