During the week before Christmas, most workplaces begin to wind down for the break. But not the Office for National Statistics (ONS).

Earlier this week, it announced a major change in the way that student loans are recorded in the national accounts and public sector finances. So what does this mean exactly?

At the moment, student loans are classed as government lending. But, as it’s widely known, not all of this lending will be ever repaid - a whopping 45 per cent of the loans are written off by the government.

Parliamentary committees have asked that some or all of the money should be treated as government spending, not lending.

David Bailey, head of the ONS’ public sector division, said: “To ensure our treatment of student loans reflects the way the system works in practice, we have decided to split the government’s student loan payments into a portion that is genuine government lending and a portion that is government spending.

“The lending element will be calculated based on expected future repayments. The remainder, which is not expected to be repaid, will be treated as government spending.”

This means that £12 billion will be added to the national deficit this year - which, obviously, doesn’t sound too great. But what does this mean for further education?

“If the government wishes to reduce the deficit, it may well have to reduce the financial burdens created by the existing student-loan system,” says Tom Richmond, senior policy fellow at the thinktank Policy Exchange.

“Rumours emerging from the Augar Review [headed by Philip Augar on post-18 education] suggest that it is considering some kind of cap on the number of students going to university, which is one way (albeit a highly controversial one) to keep a lid on the expansion of the loan system,” he adds.

This could mean, instead of choosing the traditional university route, students will be more widely encouraged to consider college-based provision and apprenticeships.

Andy Westwood, vice-dean for social responsibility at the University of Manchester, agrees: “The ONS decision has opened up a large number of new options, including for reforms that might help construct a more comprehensive, joined-up tertiary system. It also offers the opportunity for universities and colleges to lobby for teaching funding to replace any cut to fees.”

Could this be a dawn of a new era for FE? Maybe.