The government said it was expecting a late summer rush for FE loan applications for 2014/15 with the number of applications having more than halved on the same period last year.

Figures released by the Department for Business, Innovation and Skills (BIS) showed there had been 1,270 FE loan applications for next academic year by May 31, of which 1,230 had been processed.

At the same point last year, there had been 2,916 applications for 2013/14 courses, of which 1,958 had been processed.

The Association of Colleges said it was “too early to jump to conclusions” about the numbers, while a spokesperson for the Association of Employment and Learning Providers (AELP) conceded the decrease was “disappointing”.

But a BIS spokesperson said last year’s figure was higher because “many providers encouraged early applications from learners when loans were first introduced in April 2013 in order to test the system and make sure everything was in place well in advance”.

She added: “Now that providers are more used to 24+ advanced learning loans and the application system, we expect that most applications will be made in the usual recruitment period for FE which is August and September.

“We will continue to monitor take-up and have recently launched a consultation on expanding and simplifying the loans system for FE.”

A spokesperson for the Association of Colleges told FE Week: “It’s too early to jump to conclusions about 2014 loan applications.

“At a time when colleges are cutting back their adult skills provision because of government spending cuts, it is a challenge to simultaneously expand the numbers on loan-supported courses.”

It comes with the government having launched a consultation on June 19 (which will close on August 21) on plans to extend FE loans to cover 19 to 23-year-olds and make them available for level two qualifications.

Government pays half the course cost for 19 to 23-year-olds staying at levels two and three, but learners would end up having to repay the full cost under the loans system, which currently only applies to learners aged at least 24 and studying at level three or four.

An AELP spokesperson said: “The decrease [in 24+ advanced learning loan applications] is disappointing, but the numbers would probably be higher if the age range and level were different.

“We are pleased that the government is now consulting on this and if the consultation produces a positive outcome, we would be encouraging providers to review their loan strategies.”

David Hughes, chief executive of the National Institute of Adult Continuing Education, said:  “It is too soon to know if this is a true drop, but we will be monitoring the number carefully, particularly in light of the current consultation on the potential extension of loans to 19 to 23-year-olds and to level two qualifications.

“The government’s argument for extending loans is based on the premise that this will increase learning opportunities for adults.

“We need to carefully monitor the equality and diversity issues of who is taking up loans and for what courses before we can be satisfied that loans are working well.”