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Extending student loans to almost everyone over the age of 19

19th June 2019

AoC note on FE Loan Extension 26 june 2014.pdf AoC note on FE Loan Extension 26 june 2014.pdf (PDF,107.66 KB) The consultation on the future of further education loans was published on 19 June with very little fanfare[1]. It is an important document[2] setting out some far reaching proposals including: student loans will be become the preferred way for Government to support Level 2, and 4 courses for those over the age of 19 apart from those who are on benefits, taking basic skills courses or trying for their first Level 2 or 3 course. transferring the funding and regulation of higher education courses below degree level to the FE system (reversing the transfers made the other way in the 1990s). introducing maintenance loans for higher level study, again taking them outside the English HE system for the first time. removing the concurrent study rule and replacing it with some form of maximum loan per year (taking England one step closer to the Australian system) The consultation runs for eight weeks until 21 August and is open for genuine debate. At a time when politicians have taken a vow of silence about the DfE and BIS budget, the consultation is a rare opportunity to discuss what might happen in 2016 and beyond. The reform deserves attention in higher education if nowhere else because of the way it points out the large spending differences on those over the age of 19. The backdrop to the FE loan consultation is the 40% cut in Government spending on adult skills between 2009 and 2015[3]. An increasing share of the money that is left is spent on adult apprenticeships and to help people on benefit access learning. This is resulting in drastic cuts for all other adult learning and, although the BIS paper does not spell this out, the total elimination of Government subsidies is in prospect. The proposal to extend loans downward to 19 year olds and across to Level 2 qualifications is therefore a rescue mission to preserve courses from current and future spending cuts. Whether the mission works depends on whether people will sign up for courses. The proposals involve the protection of existing entitlements to free tuition. These are either written into law (entitlement to training to first level 2) or reflect current priorities (maths and English for those below GCSE level) or are necessary to support those on benefits[1]. Colleges now train large numbers of unemployed people referred by Job Centre Plus. The expansion of traineeships and the plans to ensure young adults are either earning or learning implies more of the same. The consultation also proposes the transfer of higher nationals from the HE system to the FE loan system which is a response to the deadlock surrounding HE reform and to the overspend related to the growth in private higher education. This would involve a number of changes: requirement to apply to join the SFA's register. maximum loans related to course size and content instead a £6,000 flat rate. maximum cash sum for loans issued in a year rather than number controls. possible threat to the opportunity for students to make maintenance grant applications. The consultation is a chance to express views on the practicalities of these issues including those related to the boundaries between different qualifications. The proposal throws up questions about public spending and large differences in the amounts available. Austerity continues to eat away at post-compulsory education spending a strong tide on a sandy beach. The higher education castle looks may look firm but the sand may not withstand the waves. Notes [1] BIS issued a press release to announce the consultation but the responsible minister, Matthew Hancock MP, did not mention loans at all in speech he made a few days earlier which also attracted a press release. [2] BIS FE loan consultation is here [3] Calculations explained in AoC paper on “College Funding and Finance” May 2014 available from [4] The full list of protected entitlements is set out on page 10 of the FE loan consultation and matches the list in recent skills funding statements. There was an attempt in 2011 to remove free tuition from those on benefits which were not directly related to work but policy changed in August 2011