Loans plan on hold for review of 'overall funding for skills provision'

Government plans to extend the reach of the FE loans system have been put on hold pending a review of “the overall funding for skills provision”.

A two-month consultation was launched by the Department for Business, Innovation and Skills (BIS) in June to look at making the FE loans system cover level two qualifications and more learners.

The system currently applies to learners aged at least 24 and studying at level three or four — but the consultation proposed FE loans should apply to level two and also 19 to 23-year-olds.

Government pays half the course cost for 19 to 23-year-olds staying at levels two and three, but such learners — like those aged 24 and above — would end up having to repay the full cost under the loans system.

However, in the government response to the consultation, out today, Skills Minister Nick Boles (pictured above) wrote: “It makes sense to consider the implications of these changes alongside plans for the overall funding for skills provision in the future.

“For this reason, we will not be going ahead with our plans for expansion at the moment, but will look again at these proposals in the Spending Review.”

However, the government said it would, from 2016/17, remove the rule surrounding concurrent study, which prevents a learner from undertaking two loans-funded courses at the same time.

It would also, from the same academic year, remove the repeat study rule, which prevents a learner from undertaking loans-funded courses of the same type and level.

“There were many examples where the repeat study rule is seen to be hindering progression in some sectors such as health and beauty, and joinery,” it said in the response document.

“As Advanced Learning Loans become further embedded, this may become a more wide-spread problem.”

It added: “The only exception to this will be in the case of Access to HE courses and programmes of A-levels because they are focused on a particular outcome that is related to progression.”

Meanwhile, the rule limiting a learner to a maximum of four loans over their lifetime would remain, but the government would “continue to monitor this, and if necessary, consider amendments in the future”.

Mr Boles wrote: “We will… put more power in the hands of the learner by simplifying the rules on concurrent and repeat study.

“Ensuring that we have the right funding system in place for adult learners is absolutely critical to ensuring a strong economic future. The responses we have received to this consultation give the Government a very strong evidence-base on which to make important decisions about the future of Advanced Learning Loans, in the context of the next Spending Review.”

Julian Gravatt (pictured right), assistant chief executive of the Association of Colleges (AoC), said: “The Government has consulted on the extension of Advanced Learner Loans but its plans won’t become clear until after the 2015 spending review when details of funding are available.

Julian Gravatt

“Removing the restriction to allow students to take out more than one loan at a time, will mean students can study more than one course, but we strongly support the idea of better advice and guidance to explain what it will mean to take out multiple loans.

“Given the current 24 per cent cut to the adult FE and the likelihood of more cuts in 2016, we’re concerned that the delay may mean that any loan extension could not now happen until 2017. The next government will need to take this into account.”

Dr Lynne Sedgmore CBE (pictured left), executive director of the 157 Group, said: “We believe that the system in the future must ensure equality of access for adults to a wide range of educational possibilities and, in that respect, the decision not to extend the availability of loans at this stage is something of a missed opportunity.”

New Dr Lynne SedgmoreShe added: “We must remember that the lack of availability of loans for significant numbers of adults at the same time as a reduction in government grant funding for adult learning will leave a large funding gap for the next two years.

“We will be working hard with the relevant government departments to ensure that we have an equitable, transparent and flexible approach to all adult education funding into the future – even in the context of reducing public funding.”