Small HE providers in line for OfS fee cut

Colleges and small HE providers could be in line for a cut to their Office for Students registration fee under proposals from the Department for Education.

A consultation, launched today, proposes a range of new registration fee structures for the higher education regulator, which is mandatory for providers to access student loan funding and degree awarding powers.

Registration fees are the Office for Students’ main source of operating income. Its latest annual report showed it received £31.6 million from the fees in 2024-25 from universities, colleges and private sector providers.

DfE is seeking views from the higher education sector on the distribution of its registration fee income, with various models proposed that cut fees for providers with lower numbers of higher education students, and raise them for providers with large cohorts.

Degrees of adjustment

Under the current system, providers are placed into one of 13 fee bands based on their full-time equivalent (FTE) higher education student numbers.

This academic year, fees range from £14, 775 for providers with less than 25 FTE students to £222,850 for those with more than 20,000 FTE students.

Latest DfE financial data, covering 2023-24, shows the college with the largest HE student numbers was NCG with 3,265. Today, this would place it in a band generating a registration fee of £111,794.

DfE said the current model places a “higher burden” on smaller providers. The consultation gives the example of a provider with 25 FTE students paying £591 per FTE student, compared with £11.14 per FTE student for a provider with more than 20,000 students.

A proposed “small adjustment” model would see annual fees fall for providers with up to 5,000 FTE students. A provider with 100 to 300 FTE students would pay £34,722, down £1,168 on the current £35,890 fee. A provider with 500 to 1,000 FTE students would pay £55,070, down £1,381.

That model would increase fees for larger providers, prodominantly universities. Those with 5,000 to 10,000 FTE students would pay £141,296, up £691, while providers with more than 20,000 FTE students would pay £228,570, up £5,720.

There is also a proposed “large adjustment” model that would cut fees further for smaller providers. The 100 to 300 FTE student band would fall to £32,793,  a reduction of £3,097, while to 500 to 1,000 FTE band would fall to £52, 787, down £3,664. Providers with more than 20,000 FTE students would pay £238,096, up £15,246.

DfE is also consulting on whether to introduce an additional top band for providers with more than 30,000 FTE students. Compared to the current structure, providers with more than 30,000 FTE students would pay £274,545, compared with the current top-band fee of £222,850.

Or a formula

Another option would replace the current funding band model with a fee made up of a flat charge for all providers plus a variable element based on FTE student numbers.

Under DfE’s modelling, providers with up to 500 FTE students would pay less than under the current model. Fees for the 100 to 300 FTE band would fall to £27,094, down £8,796, while the 300 to 500 FTE band would fall to £42,626, down £2,375.

But providers with more than 500 and up to 20,000 FTE students would pay more under this option. The fee for 500 to 1,000 FTE students would rise to £64,361, up £7,910. The 1,000 to 1,500 FTE band would rise to £86,577, up £15,720.

Application and degree power charges

In addition to reformed registration fees, new charges for other regulatory processes have been proposed.

These are currently partially or fully subsidised through annual registration fees.

A new initial application fee has been proposed, charged on a cost-revovery basis for providers applying to join the OfS register. This would replace the existing £28,643 flat quality assessment fee.

OfS has estimated the cost of bringing a new provider onto its register, including quality assessment costs, at between £68,000 and and £105,000 depending on the complexity of the provider.

DfE is also proposing to impose a cost-recovery fee for degree awarding power applications. It said costs related to assessing and granting degree awarding powers are currently subsidised by all registered providers as there is no additional charge for this currently. OfS estimates those additional costs, which are not covered by the quality assessment fee, range from £4,000 to £15,000.

A new fixed £11,000 fee is also proposed for applications for university title or university title name changes. This would have applied to today’s decision to allow the University of Greenwich to rename itself to London and South East University Group following its merger with the University of Kent.

The consultation closes on 21 July.