Tuesday 7th March 2023

(1 year, 9 months ago)

Written Statements
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Robert Halfon Portrait The Minister for Skills, Apprenticeships and Higher Education (Robert Halfon)
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Today I am announcing the publication of the lifelong loan entitlement (LLE) Government consultation response.

In 2020, the Government announced that they would introduce a lifelong loan entitlement to give people the opportunity to study, train, retrain and upskill throughout their lives to respond to changing skills needs and employment patterns—which is key to breaking the cycle of lower skills and lack of opportunity which affects too many of our communities.

In February 2022, the Government launched the LLE consultation seeking views on the key design principles of the LLE and how this will mean the current system in England will need to change.

The LLE consultation and supporting engagement activity ended in May 2022 and the Department for Education has spent time analysing the considerable insight and rich data gathered during the consultation, which included extensive stakeholder engagement.

This consultation response puts in no doubt this Government’s intention to deliver a radical shift in our tertiary education system and sets out the policy design across a number of key areas. We will unify the student finance system for further and higher education across levels 4, 5 and 6, bringing them closer together, ensuring all higher education courses whether academic or technical will be funded in the same way and allowing for stronger partnership between further and higher education.

Under the LLE, eligible learners will be able to access an entitlement to the equivalent of four years’ post-18 education funding—£37,000 in today’s fees.

There will be a single student loan finance system for courses between levels 4 and 6. Learners will be able to use their LLE to access a wide range of courses including all courses previously funded under HE student finance, higher technical qualifications, and courses at levels 4 and 5 previously funded through advanced learner loans where there is clear learner demand and employer endorsement.

We also recognise that labour markets can change rapidly and we therefore want to ensure that learners can retrain, upskill or reskill at an equivalent qualification level. That is why we will be removing the restrictions on equivalent or lower qualification to provide increased flexibility to learners.

Furthermore, the Government want to make sure all learners receive the right amount of student support to complete their studies. That is why, from September 2025, maintenance will be available for all designated courses and modules with in-person attendance.

This represents a significant change from the current system: for the first time, we will expand access to the maintenance loan and targeted support grants for all designated courses and modules the LLE funds, including for part-time study. The availability of this support on a part-time basis will open up opportunities for learners for whom full-time study is not possible because of other commitments. The new budget for targeted grants will be agreed and set out at the next spending review, alongside further detail on the entitlements.

The Government will for the first time allow learners to access student finance for more flexible modules of higher and further education courses. This will enable lifelong learning by allowing individuals to build up to full qualifications over a longer time period, creating new retraining and upskilling opportunities, while retaining existing funding for those studying full courses. Like getting on and off a train, they will be able to alight and board their post-school education when it suits them, rather than being confined to a single ticket.

Making sure everyone can continue to access high-quality education and training in a way that works for them at any stage of their life or their career is of utmost importance for this Government. To ensure we get this right we will be taking a phased approach to introducing funding for modules, focusing initially on job-focused higher technical qualifications and some technical qualifications at levels 4 and 5, and extending to wider level 4, 5 and 6 courses at a later date. This offer will allow more people to climb the ladder of opportunity—for instance, by taking advantage of the in-demand skills provided by HTQs, in an even more flexible modular format.

And to further ensure quality, there will be clear criteria for modules to be eligible for funding, as set out in our response to the consultation. As previously announced and as set out in the Lifelong Learning (Higher Education Fee Limits) Bill, the LLE will introduce a system whereby fee limits are set using credits. This will provide consistency across the sector in the way fee caps are applied.

The Government have committed to making the student finance system fairer for learners and taxpayers. As announced in February 2022, for all new courses starting from 1 August 2023 onwards, student loans will be issued on new plan 5 terms and conditions, which will see learners benefit from a reduction in the interest rate to RPI only. Plan 5 terms also mean learners only repay when earning over £25,000 and have a loan term of 40 years, after which any outstanding debt, including interest accrued, will be written off at no detriment to the borrower. We will continue to keep the terms of the student finance system under review to ensure that it remains fair to students and fair to taxpayers.

To ensure learners can easily navigate the courses that will be eligible for funding under the LLE, anyone who applies for funding will get an LLE personal account. This will be an online digital platform where learners will be able to view their entitlement, access information about courses to help them make informed choices about their learning pathways, and apply for loans and grants for fees, maintenance, and additional support.

Finally, I can confirm that the Government remain committed to delivering an alternative student finance (ASF) product compatible with Islamic finance principles. Our aim is that students will be able to access ASF as soon as possible after 2025.

The changes which I have set out today will have long-lasting, systematic impacts on the landscape of post-18 education affecting future generations of learners for years to come. Learners and employers alike will reap the rewards of a more flexible system that reflects and can adapt to changes in personal circumstances and the economy.

I believe that this package of measures is essential to deliver the transformation of student finance that this we need. Together they will create a fundamental shift in the way higher education is accessed, making it easier for people to train or retrain in a way that works for them and get the job they want.

More work is needed to make the LLE a reality, and this will need effort from both Government, providers and industry, but our Government response to this consultation is a major milestone toward this vision for a more dynamic and growing economy.

I want to thank all those who took their time to respond to this consultation and engage with the Department on an ongoing basis; their contributions will have a lasting impact in delivering the LLE. I look forward to continuing the hard work required to allow the launch of the new system in 2025, and to support learners to continue to acquire the skills they need to succeed in life.

Further details and the full Government consultation response can be found at https://www.gov.uk/government/consultations/lifelong-loan-entitlement.

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