The merits of an FE loans system debated

The merits of an FE loans system debated

Pictured above from left to right: Paul Warner, AELP, David Hughes, NIACE, and Martin Doel, AoC, at the EMFEC Centenary Conference in Daventry 

The FE loans system proposed by government has been criticised by the leaders of three key membership bodies.

David Hughes, chief executive of the National Institute of Adult Continuing Education (NIACE), Martin Doel, chief executive of the Association of Colleges (AoC) and Paul Warner, director of employment and skills at the Association of Employment and Learning Providers (AELP), say they’re concerned with the government’s proposals.

“The whole Level 3 and FE loans debate, I think, has been very shallow and very limited,” Mr Hughes said.

“I just don’t think we’ve got into the detail of it at all really.”

The three leaders debated the implications of the FE loans system, during a discussion on the sector as a whole at the EMFEC Centenary Conference.

The new system proposed by the Department for Business, Innovation and Skills (BIS) will require learners aged 24 and above to take out a loan if they wish to study at level 3 or 4.

Students will be affected by the loans system from the 2013/14 academic year and begin repayments once they have left the course and started earning more than £21,000.

Mr Hughes said: “A lot of the Level 3 qualifications we know don’t give the return and some of those are the sorts of qualifications, in care for instance, it’s very likely isn’t it that we’re going to say to people, here’s a Level 3, you can do it, you’ll probably never earn over £21,000 if you stay in the job that this qualification qualifies you for.

“Is that good, or is that bad?”

Mr Hughes added: “People sit with the debt for 30 years before it gets written off.

“The implications of that in terms of who gets recruited and who wants to actually take on that debt…there are all sort of issues that we need to address.”

The Student Loans Company (SLC) will be in charge of assessing all FE loans applications and make initial payments to the college or training organisation on behalf of the learner.

A final Impact Assessment and Equality Impact Assessment of FE Loans is expected from BIS before April 2012.

Mr Warner, meanwhile, said the sector was “sleepwalking” into an FE loans system which had been created in reaction to the economic crisis.

“It does look like a reaction to where we are at the moment,” Mr Warner said.

“If it is seen somehow as the right and durable thing to do in the longer term, that isn’t clear at all, and that argument isn’t really being had.

He added: “It almost feels like the sector is sleepwalking into FE loans.

“Again, I’m not really understanding quite why we’re doing it beyond the view at a fairly shallow level that it’s where we are at, there is no money, we’ve got to get money somewhere, and that’s the way we can get out of it for the moment.”

Mr Warner emphasised that it was important to ask how the FE loans system would sit alongside existing funding models, as well as its on-going impact on the sector.

“If it’s here for the longer term, we do need to understand why is it here, what is it going to do and how it is going to fit into the landscape,” Mr Warner said.

“None of that is really being debated.”

The government has provided a budget of £129 million for FE loans in the 2013/14 financial year, with a further £398 million for 2014/15.

Mr Doel said the FE loans system looked like “the least worst alternative” for the FE sector.

Mr Doel said: “A wake up and smell the coffee moment is, if the alternative is a lovely loan scheme for post-25, or no investment for post-25, an FE loans scheme suddenly looks a bit better than it would have done.”

“There is always an on-going and sensible argument for more resources for things that matter, so it’s never a closed conversation about more money in order to do things.

“But if there is no more money, and life is difficult at present time as we all know, then an FE loans scheme probably looks the least worse alternative at this stage.”

Mr Doel also said the FE loans system had been drawn up far too quickly by government.

“This has been done at a completely disreputable speed, which things are done within our sector,” he said.

“That’s why things don’t endure, it fails the competency test on any number of levels of introduction, so I think we need to think that through.”

Click here for more on the EMFEC Centenary Conference.