Closure of GSM London: the OIA’s perspective

In July 2019, GSM London (GSM) announced that it was going into administration. The closure of a higher education provider is inevitably disruptive and upsetting for its students, and we wanted to do what we could to help. We joined the task force that was set up in summer 2019 to support planning and implementation of measures to help students, so that we could feed in learning from our experience of student concerns.

We had 165 complaints from former GSM students (our remit to review complaints about GSM ended at the end of October 2020). Many of the complaints we received had common elements. This meant that we were able to build on our usual approach and develop some key principles tailored to the circumstances of the GSM closure:

  • We upheld complaints from students who were in a worse position than they would have been because of the GSM closure, financially or because of a personal impact on them, even though in some cases we were not able to make any practical Recommendations to put things right.
  • There was a limited amount of money available for payment to students and other creditors so we decided to focus our Recommendations for financial compensation on those cases where the student had suffered – or would suffer – a clear financial loss, and not to recommend compensation for distress and inconvenience.
  • Students had in general received the tuition, assessment and services for which they had paid up to the point when GSM went into administration and in most cases we did not consider that tuition fees should be refunded. But we decided that students who would have to pay more to complete their course of study elsewhere would suffer a clear financial loss.
  • We agreed with the Joint Administrators that payments to the students towards the additional costs of completing their studies should be paid to the students directly rather than to the Student Loans Company, because it was the individual students who were the unsecured creditors.
  • We decided that the validating partner provider had some responsibility to provide practical remedies to deliver opportunities to complete academic assessments, in some circumstances.

In Closure of GSM London: the OIA’s perspective, we outline some of the common themes in the complaints we received and we explore further the principles we developed and how we have applied them. We also discuss some steps that were taken that we saw had been helpful to students. Our perspective is drawn from the complaints we have seen and so does not necessarily reflect GSM students’ experiences more widely or give a holistic view of the closure.

We would like to take this opportunity to note the great efforts of staff at GSM to help their students, at a time when their own employment had been terminated, and of Students’ Union officers who worked very hard to support students.

Despite the best efforts of many involved, the closure of GSM highlighted some gaps in provision for students in this position. Many students were seriously disadvantaged by the closure but were left without a meaningful remedy. Subsequent developments such as the Department for Education’s restructuring regime and the Office for Students’ proposed student protection directions go some way towards reducing the likelihood of provider failure and mitigating the potential impact. Nonetheless we continue to believe that there is a need for some kind of insurance scheme that could help protect students, give them confidence in the system and pay out in the worst-case scenario. We would like to see more discussion and policy thought about who should provide this vital safety net and how it should be paid for. 

Closure of GSM London: the OIA's perspective
November 2020
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