Ministers must come up with a new policy to allow 18- to 24-year-olds on universal credit to access free full-time education, writes Mark Corney

During the last great recession – the financial crash of 2008 – many young people shielded themselves from a collapsing jobs market through participating in full-time education. The same is happening in the Covid recession of 2020.

About 42 per cent of 16- to 24-year-olds were in full-time education, according to data for March and May this year from the Office for National Statistics. Between April and July, the proportion had risen to 45 per cent. And we can assume the share could be higher when we get the data for this September.

Data on enrolments for 16- and 17-year-olds are sketchy but some evidence is emerging for 18- to 24-year-olds. 

There has been a slight increase compared to last year in the proportion of 18-year-olds who have enrolled on to full-time level 4 to 6 degrees, at 41 per cent by the end  of September.

More graduates aged 22 and over have entered full-time teacher training courses than usual, while applications for full-time MBAs have risen dramatically and we expect numbers on full-time one-year master level degrees also to rise significantly.

Therefore, one of the few positives of this awful recession is increasing participation in full-time education. Inspect a little closer, however, and it is only one group of 18- to 24-year-olds who have been able to shield themselves from unemployment.

They can’t study full-time and claim universal credit

These will be young people who achieved a level 3 at age 18 or 19, who have gone into full-time undergraduate higher education and then upon graduation enrolled on to full-time post-graduate courses. The picture looks very different for young adults who did not achieve a level 3 at age 18 or 19.

Although unemployed 19- to 24-year-olds might wish to study full-time to achieve a first full level 3, they can’t. Why not? Unlike full-time higher education learners, they have no access to living costs support, such as maintenance loans. At the same time, they can’t study full-time and claim universal credit.

If they did enter full-time education, the Department for Work and Pensions would suspend their universal credit, the very thing that would permit them to live and study full-time.

The number of unemployed 18- to 24-year-olds claiming universal credit in July was 530,000 in England and this will rise as job losses mount in the winter. So what does the government say to an unemployed 20-year-old wishing to access free full-time education for a first level 3 when the DWP informs them this would end their universal credit?

Of course, the same unemployed 20-year-old could say they are willing to take out a full-time maintenance loan. But the answer is essentially: “Sorry, maintenance loans are not for the likes of young people without a level 3 in further education. They are reserved for those on level 4 to 6 degrees in higher education.”

No doubt the government would tell the unemployed 20-year-old that the chancellor has introduced a comprehensive active labour market strategy to get them a job, not more full-time study. Employers have been given generous wage subsidies to offer apprenticeships, kickstart jobs and traineeships.

But the second wave of Covid-19 is stalling the economy. There will be no V-shaped recovery in the youth labour market from January. Active labour market policies work during the upswing, not the downswing.

The government has a one-size-fits-all policy for youth unemployment: wage subsidies to employers. A second policy is urgently needed alongside it, which is to expand participation in full-time level 3 vocational training for 18- to 24-year-olds, supported by access to either universal credit or maintenance loans.

In England we have an education system for 18- to 24-year-olds that helps the most qualified to shield from mass youth unemployment, but expects the least qualified to compete.

There is still time for the government to help less-well-qualified young adults get through this terrible recession – but it must act quickly.