Uncertainty warning over apprentice loans

The Shadow FE Minister has described it as “deeply alarming” that government-commissioned research says apprentices do not understand how they would be affected by FE loans.

Gordon Marsden (right) spoke out after the Department of Business Innovation and Skills (BIS) revealed a report commissioned to assess how 24+ Advanced Learner Loans would affect course uptake. The loans system, due to go ahead in a few months, was introduced after study grants for learners aged over 24 were scrapped as part of austerity measures.

Mr Marsden said the research, based on findings from focus groups with Muslims, 40+ learners, apprentices and learners with disabilities, “starkly highlights the fact they (the government) have no idea what introducing loans for adult apprentices could do to either employer demand or learner behaviour”.

Under a section titled ‘likely behaviour from 2013 onward’ the report said: “Apprentices in this sample were relatively unconcerned about the impact that removal of the subsidy would have on people in their situations, but this was largely due to the fact that they assumed that employers would continue to fund courses. They did not know this for sure, however, and many eventually wondered whether apprentices would have to pay for their courses if employers did not.”

It continued: “On balance it was difficult to establish what apprentices — younger and older — are likely to do from 2013 onwards because of the lack of information about what employers would do.”

 starkly highlights the fact they (the government) have no idea what introducing loans for adult apprentices could do to either employer demand or learner behaviour”.

Mr Marsden said: “With the new system merely months away, FE Minister Matthew Hancock and BIS Ministers urgently need to engage with this issue and ensure there is not a significant drop in 24+ apprenticeship numbers.”

FE Week reported in its last edition how Mr Marsden criticised the government for not commissioning a national marketing campaign to fully inform people of the new loans system.

A BIS spokesperson said: “While some (apprentices) are understandably unsure until they have seen the details and discussed with their employers, the research did suggest that many were likely to accept this and use a 24+ Advanced Learning Loan, particularly younger groups.”

The recent BIS-commissioned report found that 24+ Advanced Learner Loans were most likely to put off older learners from studying as they were more “savvy” with money and saw study more as “nice to have”, rather than a necessity.

The University and College Union (UCU) expressed their concern over this, warning that the increased costs might exclude older and poorer people from studying.

UCU general secretary Sally Hunt said: “The government’s excuse to cut funding for adults to concentrate resources on the younger generation completely falls down when you study this report. At a time of high unemployment ministers should be looking to make it easier for people to retrain and study at college instead of coming up with new ways to price them out.”

BIS’s research concluded that younger people (between 24 and 29 years old) were most motivated to take up opportunities in FE as they thought more in the short-term and did not feel loans would put them off a course.