Publishing giant Pearson has announced a partnership with Royal Holloway university that will allow it to enter the degree market.
The university is to validate a degree in business, developed by Pearson, which says it eventually wants its own degree-awarding powers.
A White Paper last week outlined government plans to allow the expansion of private degree providers.
But the lecturers’ union warned of a possible focus on profitable courses.
Pearson said the degree would be available from September 2012.
It said it was in talks with further education colleges, which would teach the course.
Pearson already provides vocational courses such as BTECs and HNDs, and owns the exam board Edexcel, but it does not have degree-awarding powers.
It is to design and develop the new degree, while Royal Holloway would validate and quality-assure the qualification.
Although some companies, including the fast-food chain McDonalds, already offer degrees in conjunction with universities, Pearson would be the first that already has the power to award other qualifications.
President of Pearson UK, Rod Bristow, said the new degrees would create more flexibility for students.
“A Pearson degree could allow students to go somewhere near where you live for some of your tuition, do some of it online and still potentially work,” he said.
He has said the company intends eventually to seek degree-awarding powers.
Currently only five privately-funded organisations in the UK, one of which is for-profit, have such powers.
But in its White Paper published last Tuesday, the government said it would “simplify” the process for obtaining degree-awarding powers, in order to “make it easier for new providers to enter the sector”.
Pearson has not announced fees for the new degrees, and it is not clear whether prices would be set by the company or by the colleges that are to teach the degrees.
But the company said the aim was to provide good value, and to offer degrees at a lower cost than traditional universities.
Mr Bristow also said the company was exploring whether it would be possible to offer degrees outside the system of state-subsidised tuition fee loans.
“One of the unanswered questions is whether a model can be created that doesn’t require a government-backed loan,” he said.
Prof Rob Kemp, Deputy Principal of Royal Holloway, said: “Our founders, in opening colleges for women in the 19th Century, were the first to address the challenge of widening access and we are delighted to continue this tradition today by supporting Pearson in this initiative.”
Last year Pearson said it intended to offer degree courses in business, engineering, IT and health and social care at “very competitive prices”.
A large proportion of universities have set their tuition fees at the maximum level of £9,000 per year.
But in last week’s White Paper, the government said it wanted to hold back 20,000 places to be allocated to institutions charging £7,500 or less.
The document said the government wanted to make it possible for new teaching institutions to be set up to teach external degrees – and for organisations to award degrees that they do not teach themselves.
The issues will be included in a consultation be carried out between August and October on the regulation of universities.
The University and College Union has warned that an increase in profit-making providers in the higher education sector might lead to a drop in standards.
Its general secretary, Sally Hunt, said: “One of the main concerns around an increase in private provision is the narrow focus on courses likely to earn them the most money.
“Private companies are looking to make the best returns they can and we fear that approach will lead to an incremental narrowing of the curriculum and some students doing inappropriate courses at a greater cost.”
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