Key issues in the CMA’s updated guidance for higher education

On 31 May 2023, the Competition and Markets Authority (CMA) published its updated guidance for the higher education sector. We will be publishing a detailed note of the changes shortly, but in the meantime, there are some key areas that universities, colleges providing higher education, and independent providers of higher education may want to start considering.

How are courses taught?

Perhaps unsurprisingly, given the fall-out from the COVID-19 pandemic and its impact on students, the new iteration of the CMA guidance expects institutions to provide more detail to students about the composition of their course and how it will be delivered, and there is express reference to the need to set out whether contact hours will be delivered in person, online, or through a mix of blended learning.

Institutions should therefore consider the need to review the material information they publish about their courses to ensure that the right balance is struck between providing appropriate information to students and prospective students, whilst retaining some degree of flexibility around methods of delivery.

What about variation clauses and limitations of liability?

The updated guidance also provides more details of the CMA’s expectations around variation clauses. These should be specifically drawn to the attention of students in the offer letter or some form of executive summary and it is not sufficient for them to be added to the “small print”.

Whilst ensuring that any variation clauses are fair, higher education providers should make sure that there is appropriate provision for changes in the pre-contract information provided to students, as otherwise changes are likely to be ineffective unless students expressly agree to them.

This is helpful clarification from the CMA, as guidance published by the OFS during the Covid pandemic could have been read as suggesting that consent was needed even where very clear provision for change had been included in the pre-contract information.

Which students are in scope?

Whereas the last iteration of the guidance expressly emphasised its focus on undergraduate students, the new guidance makes it clear that it will apply to any students who meet the definition of consumer, irrespective of the level or type of study.

The guidance also includes a helpful section on considerations relevant to deferred students. This may reflect the increased volume of deferrals seen during the Covid pandemic and emphasises the importance of students who are considering whether to defer being able to understand how this will affect their rights and entitlements under their contracts with the institution.

The practice of requiring students to sign up to new terms and conditions for each year of enrolment is expressly disapproved of in the guidance.

Limitations of liability

Institutions should also consider carefully any terms limiting liability for breach of contract. The CMA’s new guidance refers to the need to restrict such clauses to problems unavoidably caused by factors beyond the institution‘s control and queries whether industrial action by the institution’s own employees is truly such a factor.  The guidance disapproves of clauses that described liability being limited “so far as the law permits” or similar terms, on the basis that such phrases are not easy to understand.

Managing student debts

There is some additional, more detailed, guidance provided about the appropriateness of sanctions for non-payment of tuition fees and other academic fees. The CMA recognises that institutions need to be able to recover outstanding debts, but does not consider that preventing graduation or progression is an appropriate way to do this for debts that are separate from or ancillary to the core educational service. Ways in which institutions should instead consider managing non-tuition academic debts include:

• Early intervention to support students in financial hardship;
• The use of commercial debt, collection practices;
• Incentives for timely payment; and
• Withholding services of the same type.

The CMA recommends the development of a clearly accessible public policy on student debt, from which students should be able to foresee the consequences or implications of non-payment. The policy needs to be reasonable and fair and action under it relevant and proportionate. For example, unpaid library fees might as a last resort result in library facilities, being withdrawn but the CMA would consider it unreasonable to withhold graduation or progression for outstanding library fines.

What should institutions do next?

As well as re-visiting their terms and conditions, in particular, to ensure that variation clauses and limitations of liability are fair and reasonable, institutions should consider carrying out a review of:

• whether relevant information is published about courses, policies and procedures;
• how accessible such information is; and
• how well it is communicated to students around the time they are considering whether to apply and when they are in receipt of an offer.

In our experience, there is sometimes a lack of clarity in the underlying information about the services, which cannot be corrected by even the fairest and best-drafted terms and conditions and this creates an area of significant legal risk in the context of consumer protection.

We can support you through that process

If you need some guidance or advice with reviewing your terms and conditions then our dedicated team of education solicitors can help – contact us today.