FE loans met with “widespread dismay”

Only one in ten adults say they would “definitely” take out a loan to study a level 3 course in FE, according to research commissioned by the Department for Business, Innovation and Skills (BIS).

The study, carried out by the social research agency TNS BMRB, found that 42 per cent of respondents would be unlikely to take out a “24+ Advanced Learning Loan” in the next two or three years.

The findings add to growing concerns about the impact of the new policy, which will affect all learners aged 24 or above and studying at level 3 or higher in the 2013/14 academic year.

Gordon Marsden MP, shadow minister for FE, skills and regional growth, told FE Week: “There were some statistics in this that were very disturbing in terms of what they indicate about the resistance to taking up loans.”

Toni Pearce, vice-president (FE) for the National Union of Students (NUS), added: “It would be a national tragedy if those who have been shut out of education in the past were even further deterred from taking up life-changing routes to learning by the creation of new financial barriers.”

A report published by the Department says TNS BMRB surveyed 405 potential learners, aged between 23 and 64, who completed a full level 2 course in the 2010/11 academic year.

One in ten respondents (12 per cent) who declared they would be progressing to a level 3 course in the next two or three years said they would “definitely” take out a loan, while a further 21 per cent said they “probably” would.

John Hayes MP, minister of state for FE, skills and lifelong learning, told FE Week: “I thought the research was helpful and encouraging – I wouldn’t go too far with this – but encouraging, and provided a useful platform for us to gauge how we now move forward.”

He added: “The interesting thing about the (research) was that there was less fear, ultimately, about loans then some might have claimed.

“Clearly most people said they would continue with their learning and they would take loans as part of the package.”

However, more than 40 per cent of respondents who wanted to study a level 3 qualification in the next two or three years said they either “definitely” or “probably” wouldn’t take out a loan.

Jon Richards, the national secretary for education at Unison, said: “The government must now stop and listen, otherwise it risks inflicting chaos on the further education sector.

“Many learners are going to be priced out of education and skills altogether.

“Ministers should therefore call an immediate halt to their ill-thought out fees policy.”

The research was commissioned by BIS to find out how learners would react to the new FE loans policy, as well as how best to ensure its impact “on learners’ choices and options is minimised’.”

The study, which also included group debates with more than 200 people, found that most potential learners met the idea of an FE loan with “widespread dismay”.

The report states: “(It was) common for respondents to feel that the emotional and financial costs of a loan would outweigh the uncertain and in all likelihood deferred benefits of FE, and suggested that they would have to reconsider taking a course on this basis.”

It later adds: “Only a small minority of ‘career advancers’ did not immediately reject the idea, as they felt their course was their only way forward for their chosen career, so were unwilling to consider alternatives to FE and abandon their plans.”

However, the research by TNS BMRB also found that learners were more supportive of the policy when they were provided with further information.

“When the facts around the link between income and repayment are communicated clearly and immediately, that repayments are low and affordable and that this is a loan from government and not a bank, this research suggests the reaction was much more positive and the impact on course take-up would be greatly reduced,” the report states.

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  1. Scott Upton

    This survey seems to support our College’s thoughts that 24+ Advsnced Learning Loans (snappy title) could cause lots of problems.
    In disadvantaged communities, people are often ‘loan-averse’, which is one reason less of them go to University. Now we are risking turning them off Level 3, particularly with the complexity of the repayment terms and the length of the loans.
    If, as the Government predicts, only 40% of loans will be repaid they must surely be expecting to minimise ‘losses’ due to a lower take-up than would have been the case.
    Treasury ministers, can’t you find something non-esential to cut????
    We are also concerned at the SLC’s capability to manage the fluidity of FE learners who dont, after all, have a UCAS lead in to their courses.

  2. Allan Isdale

    I believe that the 24+ Advanced Learning Loans would certainly benefit from a marketing drive.
    It is very much the same as existing Student Loans, they offer more choice in provider and are only repayable once a level of earnings is attained.
    I believe that those who wish to better themselves by obtaining qualifications would not object to paying back a loan at an affordable rate once they achieve what should be a job with higher earnings potential.
    It is time to stop fighting against the Government and start explaining the concept to potential learners in a language they understand and that will equip and encourage them to take an active part in their own futures.

  3. Many people are debt adverse and rightly so

    The threat of loosing 9% of your paycheck even if it it only starts after £21k is a very serious problem for people from low enough income backgrounds, especially I they know that they dont have family who can support them in years to come.

    To expect people from less well off backgrounds to have to choose between remaining unskilled and uneducated or loosing 9% of their paycheck every month for years to come is compleatly unnacceptable.

    equality of access to education is a right under the human rights act, also under the same act the govornment is required to progressivly make education free, not progressivly take free education away.