FE colleges will sail into uncharted waters when they raise course fees in line with government plans to make learners pay their way.

The Learning and Skills Council says there are few studies or models from abroad on which to base the new higher-fees culture. International data is ambiguous and largely focused on higher education.

Colleges broadly agree with the idea, but are nervous about the effect fees may have on enrolment.

The Association of Colleges says the relatively low contribution fees make to college budgets is largely a result of the Government’s drive to enrol disadvantaged learners. The social composition of colleges may have to change if more money is to come from employers and individuals.

“The objective of more employer and individual fee income is an important one, but we doubt that the Government wishes this to take priority over its other policies - for example neighbourhood renewal.”

At the AoC conference last month, Education Secretary Charles Clarke told principals that they needed to diversify their sources of income, find new business and collect more from fees.

Mr Clarke’s grant letter to the Learning and Skills Council for 2005-06 mentions “developing a better balance of contributions from adult learners, employers and the public purse”.

The Government has pulled out a barrage of statistics to make its case. For example, self-financing of learning in the UK is comparatively low, according to the International Adult Literacy Survey. Only 19 per cent of students pay for job-related courses, compared with an average of 37 per cent across 11 countries in the Organisation for Economic Co-operation and Development, Another argument is that FE colleges are not collecting all the fees they could. The LSC says that in 20023, the FE sector failed to collect some Pounds 100 million of pound;260m in potential fee income.

Ministers want to reform the fees framework. At present, the LSC pays 75 per cent towards the cost of a course (and up to 80 per cent including weighting for factors such as disadvantage).

It is assumed that learners will pay the rest if they are not entitled to fee remission. Those entitled to remission are 16 to 18-year-olds, adult learners on a basic skills course, those on a relevant income-related benefit, and adults pursuing their first full level 2 (GCSE-equivalent) qualification.

It is proposed that the 25 per cent paid by the learner should increase to about 35 per cent. On the expected contribution of a learner of pound;1.23 an hour, this represents an average rise of 50p, taking the contribution to Pounds 1.73 an hour. Raising the contribution from 25 to 35 per cent may seem modest, but if a course costs pound;100 and the fee is increased from pound;25 to pound;35, this represents an actual increase of 40 per cent.

That is what worries colleges, says the AoC’s director of finance Julian Gravatt. If fees go up and courses lose students, then a college could soon be running at a loss.

“While the college sector is not averse to charging fees to those who can afford them, there’s a nervousness about whether fee increases will have an effect on enrolment,” he said.

There is also concern that after years of hard work to widen participation, higher fees could scare off students on lower wages.

Colin Flint of the National Institute of Adult Continuing Education agrees with the Government’s policy as long as fee remissions are safeguarded.

“Our concern is that it may take longer for people to get used to the change than will be allowed. I can’t see employers being willing to pay the higher fees, never mind individuals. And we don’t want disadvantaged learners to be disadvantaged further.”

Another worry is the lack of a model on which to base the moves.

“We’re bedevilled by the fact that FE doesn’t crop up in the international comparisons, so it’s hard to get a handle on it,” says Mick Fletcher, research manager with the Learning and Skills Development Agency. “OECD states do not have anything to compare FE directly with.”

The evidence is contradictory. “Attitudes to debt”, a survey by Universities UK, said: “American research shows that financial aid has a positive impact on student enrolment, while net cost has a negative impact for low-income students.” LSDA research found no correlation between numbers of students and free education. It found high participation rates in Denmark, where learning is free, but also high participation in Japan, where it is expensive.

Neither Scotland nor Wales plan to make colleges increase students’ fees.

Tom Kelly, chief executive of the Association of Scottish Colleges, said:

“It would be a new departure in Scotland were ministers to say the sort of things I heard at the AoC conference.”

Fforwm, the Welsh association of colleges, said the focus there is on trying to increase the income colleges receive from employers.

The LSC is consulting on the time needed for the changes, whether to bring them in over two years or four, and when to introduce them: 20056 or a year later. It is also producing a good practice guide in the new year.

A spokesman said the LSChad little research to go on. “There was little we could really use,” he said. “That’s partly why we are going so carefully on the consultation. It’s new territory.”