Calls are growing for the further education loans system to be radically overhauled, following claims that proposed changes to repayments would disproportionately hit college learners.
Under plans unveiled by the Department for Business, Innovation and Skills (Bis) this summer, the student loan threshold for repayment would be frozen at £21,000 until 2021, rather than increasing in line with average earnings as had previously been decided.
While the government consultation document states that this would “reduce government debt” and “put higher education funding on a more sustainable footing”, the changes would also apply to advanced learning loans for FE students aged 24 and over. Experts have warned that the move would affect a higher proportion of FE learners than their graduate counterparts.
The NUS students’ union response to the consultation says: “Many such borrowers, and a disproportionate number of women learners, are more likely to be pursuing qualifications in low-paid sectors such as social care. These changes will draw more such study-leavers into repayment once they are working, or require them to make higher payments, which many can ill afford.”
FE policy analyst Mick Fletcher said retrospectively changing the terms of loan repayments for current students would “undermine confidence in the whole system”.
“Loans haven’t been at all popular in FE,” he told TES. “The number of loans has fallen well below the funding allocation. It does seem a real piece of chutzpah to say, ‘Incomes haven’t gone up as much as we promised you they would, so you’re going to have to repay us at a lower threshold.’”
A report published this week by right-leaning thinktank Policy Exchange calls for a major change to how student loans operate in the FE sector. HE students are entitled to a “financially generous loan system for both tuition and maintenance”, it says. But those in FE receive only “partial government support for a level 4 qualification if aged 19-23 and a poorly understood loan for level 4 if aged 24-plus”.
Non-HE courses at level 5 are not eligible for loans at all, the report says, adding that this “makes no sense either in equity terms, policy delivery terms or administrative terms”.
Policy Exchange calls for the introduction of a single student loan system for all post-19 training irrespective of the type of course taken or institution attended. It suggests a “drawdown account” with a lifetime balance, which individuals would be free to use for whatever qualifications they chose.”
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