The student loans system will come under parliamentary scrutiny – an investigation which may include FE.
The Treasury select committee’s inquiry into student loans, launched today, will focus on a range of issues including raising the repayment threshold, and how effectively the government is managing the loan book.
The initial remit focused on higher education, rather than advanced learner loans for FE learners, which have struggled with low take up since they were launched in 2013.
“The committee is scoping its inquiry at the moment and given the DfE’s advanced learning loan budget is administered by the Student Loans Company in the same way as HE loans,” a source told FE Week. “They may also be of interest to the committee as part of their student loans inquiry.”
FE loans, originally known as 24+ loans, were introduced in 2013/14 for learners aged 24 and older and studying courses at levels three or four.
Unlike HE loans, FE loans are only available to cover course fees, and not living costs.
Their introduction corresponded with a drop in adults studying at these levels – from 273,400 in 2012/13, to 169,400 in 2015/16.
Despite this fall, loan eligibility was expanded in 2016/17 to include 19- to 23-year-olds, and courses at levels five and six.
FE Week reported last month that almost £1 billion in loans funding has gone unspent since they were introduced, as FE learners have been reluctant to get into debt to pay for their education.
That’s not the only problem to plague the system: apprenticeship loans, originally introduced alongside the FE loans for apprentices aged 24 and older, were quickly scrapped after adult apprentice numbers plummeted.
Just 404 people took out an apprenticeship loan in the seven months after they were brought in, leading then business secretary Vince Cable to execute a quick U-turn on the policy.
The first evidence session of the inquiry will be held on Wednesday, October 18, and will hear from Dr Helen Carasso, a lecturer in higher education at Oxford, and Dr Andrew McGettigan, a freelance writer and researcher on higher education – both of whom have written extensively about student loans.
It will focus on the impact of student loans on the public finances, the success or failure of fee funding to act as a “market” for higher education, and the impact of student finances on students.
Further evidence sessions will be announced in due course.
“Student loan debt is projected to be around £160 billion within six years, and the government has announced that it will review the whole student finance system,” said former education secretary Nicky Morgan, who is now chair of the Treasury committee.:
“The committee will scrutinise the current system and any future developments closely.”