Doubts are being cast over the potential for huge US commercial providers to successfully enter the UK degree market after a major player again downgraded its near-term forecasts for growth in the sector.
A financial report filed earlier this year by BPP's parent company Apollo Group shows that $220 million (?134 million) was taken off the value of the UK's only for-profit degree-awarding institution due to pessimism about the market's prospects.
It was the second time in six months that BPP, which was bought by Apollo Global, a subsidiary of Apollo Group, in 2009 for just over $600 million, has suffered a major "impairment" of its value.
End-of-year results filed by the company - the largest for-profit in the US and owner of the University of Phoenix - with the US Securities and Exchange Commission (SEC) last October recorded a $170.4 million downgrade.
In its latest statement - filed with the SEC in March - Apollo says that BPP, which focuses on business and law education, had "lower than expected" student numbers for its finance and accountancy courses.
Apollo says it has also downgraded its forecasts for future years "as we now believe that we will likely experience further near-term declines".
Mark Brenner, senior vice-president of external affairs at Apollo Group, insisted that BPP remained "absolutely" at the core of its long-term plans in the UK and continental Europe, adding that it was "incredibly optimistic" about BPP's prospects. "We think that longer term, any short-term headwinds will dissipate," he said.
And Carl Lygo, BPP's chief executive, warned against reading too much into the figures, claiming that the write-down gave Apollo "a lot more latitude to take a long-term view of the investment that it is putting into the UK".
"It's a pretty shrewd move because you're creating a lot of room for manoeuvre. If the money is sitting there on your balance sheet rather than having been written off, you're under more pressure to make short-term profits to achieve the valuation," he said.
White Paper knuckle ride
The move comes at a crucial time for the for-profit sector, which is eagerly awaiting the coalition government's higher education White Paper.
Despite repeated indications that ministers will make it easier for companies to compete with publicly funded universities, all eyes will be fixed on how much regulation accompanies the proposals.
Matt Robb, senior principal at The Parthenon Group, an international consultancy firm that advises on the higher education market, said the important distinction was whether regulation was about "quality" or "bureaucracy".
"If there is a huge amount of bureaucracy...then (for-profits) may say that compared with Brazil and other markets in the world, (the UK) is not worth the effort," he said.
"But I would separate out meaningless bureaucracy that just raises costs from (regulation associated with) quality standards, which I suspect won't intimidate them."
However, Roger Brown, professor of higher education policy at Liverpool Hope University, said he found it difficult to see how the government could create the incentives that for-profits craved without compromise.
"The government faces a difficult balancing act - it has made such a song and dance about competition that it has to offer them some concessions, but it is hard to see how it can do that without diluting the rules on quality," he said.
A crucial aspect of the White Paper will be how much more access to taxpayer-funded loans the government proposes to give to students of independent providers.
However, Mr Robb predicted that even if there were a cap on numbers, for-profits would try to prove their ability to offer higher education to underrepresented groups in the expectation that the limit would be raised at a later date.
He also stressed that for-profits would still be interested in partnerships with publicly funded universities, and that traditional institutions in turn would modify any views of private providers as "the enemy".
"I think we will see more subtle and innovative ways of approaching the problem," he said.
Mr Lygo said he was confident that BPP could grow its market share without help from the White Paper. But Sally Hunt, general secretary of the University and College Union, said Apollo was "banking" on the UK government to help it out.
"As our universities struggle to cope with damaging cuts and students are hit with higher fees, it is not the role of the taxpayer to bail out privateers interested in making a fast buck out of higher education. If Apollo gets a foothold in the UK, students will be the biggest losers."