In the evolving landscape of higher education, private equity has begun to play a significant role, raising crucial questions about the future of academic institutions in Britain. This article explores the impact of such investments, particularly focusing on a recent acquisition that exemplifies the trend.
By Guy Standing, a research associate at SOAS University of London and author of ‘The Blue Commons: Rescuing the Economy of the Sea’ (Pelican, 2022). He serves as a technical advisor for the basic income pilot in Wales. Originally published at openDemocracy
Recent discussions surrounding the financial crisis in British universities have largely overlooked a deeper issue: the transformation of these institutions from hubs of intellectual exploration into systems designed to churn out ‘human capital’ that aligns with economic growth demands, heavily influenced by financial interests.
A telling incident occurred in July 2025, which went largely unnoticed by politicians and the media. An American private equity firm, Brightstar Capital Partners, acquired a 50% stake in a prominent British university, marking a step that would shape the future of academic pursuits.
Arden University, a for-profit institution, stands as the UK’s fastest-growing university, boasting 33,000 students enrolled in either online programs or at one of its six physical campuses, including three in London and one in Berlin. The institution was granted university status in 2015, following the acquisition of degree-awarding powers. Prior to that, it operated under the name Resource Development International, an online business school established in Coventry in 1990, before being sold to Capella Education in 2011.
In 2016, Arden was acquired by Global University Systems, a Dutch for-profit conglomerate. This year, Brightstar reportedly paid over $1 billion for its 50% stake and plans to appoint billionaire Marcelo Claure, a significant figure in the technology sector, as chair of the university’s board. Claure, originally from Bolivia and now a U.S. citizen, has ambitious plans for the university, including the introduction of artificial intelligence to translate its 140 career-focused degree programs into over 150 languages. Arden intends to offer UK-accredited degrees to full-time students worldwide starting next year.
This transaction not only reflects the ongoing crisis in British universities but also poses pressing questions about their purpose within society. We need to ask ourselves what we expect from higher education institutions.
Since ancient Athens, the pursuit of knowledge has been intertwined with the respect for truth, morality, and empathy. Despite having access to more education than ever before, there appears to be a decline in the respect for truth, as evidenced by the rise of disinformation and untruthful leadership, exemplified by figures like Donald Trump, Boris Johnson, and Nigel Farage.
The foremost universities of the last millennium formed enclaves devoted to the collaborative pursuit of truth, honing moral values and nurturing citizenship. These institutions represented the zenith of educational aspirations, designed to cultivate critical thinking skills.
For generations, universities upheld a liberal perspective on education. In 1852, Cardinal John Newman asserted that university training elevates society’s intellectual tone, producing individuals who possess a clear understanding of their beliefs and the ability to express them eloquently. He highlighted that universities were not intended solely for vocational training, but for fostering capable, cultivated individuals with a commitment to ethical living.
This notion found substantial backing in the 1963 Robbins Report, which earmarked universities as platforms for cultivating democratic values, empathy, and social responsibility. The report emphasized that institutions should nurture well-rounded individuals rather than merely specialists.
In contrast, Arden University, with its concentration on distance learning and practical programs like health management, data science, and finance, seems far removed from this ideal. Notably absent are courses in the humanities that promote cultural and philosophical discourse.
Arden mirrors the trajectory of Phoenix University, once the largest online university globally, which echoed similar sentiments as its founder, John Sperling, who notably disregarded the value of expanding students’ intellectual horizons. With the ascendancy of such models, educational institutions risk devolving into mere training factories focused solely on profitability.
This trend is not isolated; it represents a broader pattern where private institutions, such as BPP University and Regent’s University London, emulate similar operational methodologies while public universities also veer towards this profit-driven path.
Over the past 50 years, the relationship between universities and commerce has grown increasingly symbiotic, culminating in the 1985 Jarratt Report, which advocated for treating universities as corporate entities. Significant changes occurred in 1992 when polytechnics transitioned into universities, further deepening the intertwining of education with economic agendas.
Today, Arden aligns perfectly with this modern educational paradigm, boasting a strong employability focus across its programs. Its impressive financial performance, doubling its profits within a year, underscores its primary aim: generating revenue.
Arden appears to seek parallels with BPP Holdings, owned by TDR Capital, which attempted to sell BPP University for approximately £2.5 billion, indicating a growing valuation. However, this raises another crucial question: Should private capital control the trajectory of British universities? When profit is the priority, the incentive shifts towards maximizing tuition fees at the cost of educational quality.
In July 2024, the Office for Students (OfS) placed Arden on an improvement notice due to low degree continuity and completion rates, attributing these challenges to inadequate student support. Despite Arden’s assurances of investment in student success, rapid enrollment growth raises concerns about compromising quality in favor of profit.
The challenges extend beyond private institutions, as public universities, competing for student enrollment, increasingly divert funds away from academic pursuits towards marketing themselves against competition. Alarmingly, this has resulted in just 40% of tuition fees being allocated to teaching across most institutions.
Inviting private equity into the higher education sector brings numerous risks, fostering a business model that prioritizes short-term profits over genuine educational missions. Historical evidence demonstrates that sectors dominated by private equity often experience asset stripping, consolidation, and a disregard for educational integrity.
Allowing private equity firms to manage British universities creates an environment ripe for exploitation and profit-driven practices, akin to their agenda in early childhood education. One tactic could be ‘education dumping’—lowering tuition fees to attract students from public universities, subsequently inflating prices once competition dwindles.
The emergence of private-equity-funded universities poses a significant threat to the 150 state-funded institutions across the country. A study of private equity deals involving U.S. colleges highlights a trend of increased student debt, higher fees, declining graduation rates, and low post-graduation earnings. Moreover, evidence shows that healthy firms acquired by private equity are more likely to face bankruptcy than similar organizations unaffected by such takeovers.
In 2011, GSM London, a for-profit college, was acquired and later became embroiled in a loan fraud scandal, leaving students and staff in turmoil when it went bankrupt in 2019. The ramifications of private ownership raise alarms about ideological biases impacting university curricula and governance processes, particularly in instances where donors influence institutional priorities.
Another pressing question arises regarding the implications of having British universities owned by foreign entities. Wealth siphoned abroad through these institutions offers limited benefits to domestic students and staff—raising concerns about the integrity of UK-accredited degrees taught in foreign languages, fostering a knowledge gap in the English language.
What does this indicate for the cultural and societal fabric of Britain? Selling off its educational assets to outside investors threatens to undermine the legacy of a nation rich in intellectual history. The UK, home to renowned figures such as Shakespeare and Newton, must reconsider these trends before sacrificing its educational heritage for financial gain.
Guy Standing’s new book, Human Capital: The Tragedy of the Education Commons, is set to be published in January 2026.
