The FE sector is worried by the negative impact FE loans have had on learners from disadvantaged backgrounds.

A government report published today has investigated the impact of the impact of the government’s FE reform agenda.

Its findings were largely based on analysis of responses to a telephone survey of 325 providers, as well as 50 more in-depth interviews, and individual learner records data.

It focused in-part on the introduction in 2013/14 of FE loans, at first just for learners studying courses at levels three or four and aged 24 and older.

Low interest and poor take-up of the loans by particular groups of learners, including those from disadvantaged communities was “a real concern for some providers” and “there is some evidence that the introduction of loans is leading to a decline in participation and provision at level three and above”.

Several providers indicated that they felt that “adults from disadvantaged areas were particularly reluctant to take out a loan”, though “for some providers, the policy has resulted in an increase in learner participation”.

It continued: “However, for most providers this has not been the case, with many reporting a decline in adult participation. Changes in learner numbers were considerable for some providers.”

FE Week revealed hugely disappointing uptake levels last month, and 58 per cent of FE loans funding – amounting to almost £1 billion – was found to have not been spent since 2013.

This figure, revealed by a Freedom of Information request, was branded a “systemic failure” that could unravel the government’s plans to upskill the nation in a post-Brexit world.

The Student Loans Company revealed that just £652 million in loan-funded provision had actually been delivered since 2013, against a massive £1.56 billion in allocations.

In terms of the overall impact of FE loans, which were expanded in 2016/17 to include 19- to 23-year-olds, and courses at levels five and six, it was found that 55 per cent of FE colleges were more likely to feel it had impacted a great deal on their organisation.


“Private providers (42 per cent) and ‘other’ providers (36 per cent) were more likely to say it had not impacted on their organisation at all,” it said.

Several providers further highlighted a particularly good take-up of 24+ loans for access to higher education provision.

“It was felt that there were stronger incentives for learners to take out a loan to fund this type of provision, including the loan being written off should they progress to university and complete their course.”

Providers also suggested that further work will be needed to develop learners’ understanding of the loans system and support increased engagement.

It also reported on the impact of the government’s much-maligned GCSE maths and English resits policy.

Since 2013, all 16- to 19-year-olds without at least a grade C in GCSE maths or English have had to enrol in courses in these subjects alongside their main programme of study.

This requirement was tightened in 2015 to require all of those with a grade D – now a 3 –  in those subjects to sit a GCSE course, rather than an equivalent stepping-stone course such as functional skills.

Today’s report highlighted concern on the impact of this policy on apprenticeships.

“The insertion of a GCSE maths and English requirement into apprenticeship is reported as having weakened demand for apprenticeship from some employers who do not see time spent on an ‘academic’ element as a necessary component in development of the skills they need,” it said.

It also reported support for the view that “developing English and maths to an adequate level by a functional skills approach was preferable to driving all learners towards formal GCSE examinations”.


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  1. Lots in the report about unintended consequences (or poor planning as it’s otherwise known).
    Even the reports itself seems a little evasive in places. Table showing % decrease each year, but only giving the % not the figures, making the reader do the donkey work to arrive at the total drop over the period.

  2. Lets be honest, this is how is played out.
    Treasury instructs departments to reduce spending.
    Minister instructs civil servants to reduce spending while maintaining services to avoid accusations of slash and burn to protect career trajectory.
    Loans introduced – public funding shifted onto learners as debt but still described as funding.
    What could possibly go wrong?
    Numbers drop, loans book gets sold off, % interest rises, expected rates of write-offs soar. (remember the BOE base rates of 0.25%!)
    Report commissioned to understand the dynamics.
    Bottom line, I would suggest, it’s cost the public purse more per successful qualification than when it was directly Government funded.
    But it kept lots of people looking busy, which must be a good thing, right?