Older apprentices face a new threat when the FE loan system is introduced next year: if they lose their job while they are studying, as well as finding themselves out of work and without the qualification they were training for, they may also have to repay thousands of pounds in fees.
The Skills Funding Agency revealed that if apprentices aged 24 and over cannot find another employer to continue their course, they will be liable to repay the loans that covered their course fees.
"It is expected that any apprentice who has been made redundant will be fully supported to find alternative employment and continue their programme," the agency said in a briefing document. "Where this is not possible the individual will be liable for all payments made until the point of withdrawal."
Apprentices are partially protected from redundancy, because the courts consider that apprenticeship agreements can amount to a common-law contract requiring an employer to keep them on until they finish their course. But many cases of redundancy occur because their employer goes out of business, meaning there is no option to retain them.
Official figures for the number of apprentices made redundant or "displaced" are hard to come by. A parliamentary question revealed that 490 apprentices lost their jobs in the six months after May 2010, although only a small proportion were over 24.
However, the number of older apprentices has more than trebled under the coalition, with nearly 40 per cent of all new starters coming from the older age group by the end of 2010-11.
The National Union of Students (NUS) said older apprentices were being asked to take an unreasonable risk. "Not only is the government asking people to pay to learn, not only are they asking apprentices to pay to work, but they're also asking redundant apprentices to pay for training that, through no fault of their own, they weren't able to complete," said Toni Pearce, NUS vice-president for FE.
CITB-ConstructionSkills, the sector skills council that represents the construction industry - perhaps the most highly organised industry in terms of training - established a system to find new placements for apprentices when 3,000 of them lost their jobs as a result of the 2008 recession.
Mike Bialyj, director of employment services, said most had worked at companies that had become bankrupt as a result of the financial downturn, adding that CITB-ConstructionSkills had managed to place about 1,200 of them in new jobs.
"It was very, very difficult in the circumstances," he said. "What you've got to remember in this situation is that when you have apprentices displaced, if you find them new companies then you take away another place for a potential new apprentice.
"And it's a very, very sad situation if someone takes out a loan to better themselves and ends up with no job and (in) debt. From the perspective of society, the whole idea is for people to improve their situation."
Providers could find themselves responsible for informing over-24s about the risks of taking on an apprenticeship loan, according to the Association of Employment and Learning Providers (AELP), whose members teach around 70 per cent of apprentices.
"It increasingly looks as if the provider will have a vital role to play in setting out the full risks involved to the learner before embarking on an apprenticeship with a loan, including the risk of redundancy," said an AELP spokesman.
"The other challenge that could be on the horizon is perhaps an obligation that the original training provider delivering the apprenticeship should help find the redundant learner another job. And that might be a real challenge in the current economic climate."
The National Apprenticeship Service (NAS) said students would only have to pay for the learning they had undertaken if their course was abandoned because of redundancy. A spokeswoman stressed that the loans were only repayable if the former apprentice was in work and earning more than pound;21,000.
"If an apprentice is made redundant partway through their programme they will not automatically begin repaying their loan," she said.
Over the past two years, NAS figures show that redundancy was given as the reason for an apprenticeship ending in only 0.3 per cent of cases. But, based on last year's figures, that would equate to more than 1,300 students.
How FE loans work
From September 2013, people aged 24 and over will no longer be funded to study at level 3 - A-level equivalent - and above. Instead, they will be offered higher education-style loans, officially called 24+ Advanced Learning Loans, to pay course fees. The loans will be repayable with interest once they are earning more than pound;21,000.
The government estimates that up to 15 per cent of FE learners will need to take out loans.
Students will be able to take out up to four consecutive FE loans, for different levels or types of qualification.
Apprentice employers will still be expected to contribute half the cost of the qualification, but usually that means an "in kind" contribution of equipment or time off for learning.
Original headline: Older apprentices must pay back loans even
if they lose their jobs