Advanced Learning Loans

John Hayes Excerpts

Thursday 12th July 2012 Written Statements

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

Today we lay regulations before Parliament which will allow adults over 24 to benefit from loans for fees in further education: 24+ advanced learning loans. The regulations are made under the same powers as the Education (Student Support) Regulations, which underpin the higher education student support system. From the 2013-14 academic year, loans will be available for learners aged 24 and above studying courses at level 3 and above, replacing grant funding for this group as we focus our state investment on those under 24 years of age, those without basic skills, and those seeking work.

The intention to offer loans in further education was confirmed in November 2010, as part of the Government’s strategy “Skills for Sustainable Growth”. A public consultation followed in 2011, leading to the publication of impact assessments. Implementation is well under way, and these regulations are the final step in what has been a full and open process.

This is a progressive system. Learners will pay nothing up front, removing one of the main barriers to participation in training that adults commonly report. Repayment will be linked to income so there is nothing to pay until the learner is earning more than £21,000. Rates of interest will be lower than anything in the high street; and outstanding balances will be written off after 30 years.

Research published by the Department for Business, Innovation and Skills shows that 74% of people say they might, probably would or definitely would undertake learning following the introduction of loans. When the terms and conditions are explained, they become even more positive. This is why, in our impact assessment, we conclude that with clear and transparent communication to learners, we expect full take-up of the available funding for loans.

However, this is the first time that loans have been available in further education, and we want to ensure that appropriate safeguards for learners are in place. Our commitment to social mobility, and the critical contribution of further education to it—our mission that learning should drive social purpose and serve the common good—remains unabridged, undiluted.

In this spirit, I can therefore confirm that we will put in place an extensive and substantial range of support measures alongside the introduction of loans. The package will comprise:

An offer to individuals taking access to higher education courses that on completion of their higher education programme, the Student Loans Company will write off the amount outstanding on the loan for their access course. Access courses are designed to help those with low qualifications but high ambitions progress into higher education:, it is our duty to support those learners.

A £50 million bursary fund over two years, disbursed by colleges and training organisations. This will help vulnerable learners such as those with learning difficulties or disabilities, parents who need help with child-care, and ex-military personnel. The level of the bursary fund will be kept under review so we continue to provide the right level of support for those who need it.

Additional information, advice and guidance for adults who are uncertain about loans, provided by the National Careers Service, including a targeted face-to-face session—a “learning healthcheck”—with a careers adviser for older adults who research published by BIS in May suggest are less likely to respond positively to the idea of taking out a loan.

We have been working with the Association of Colleges, the 157 Group of Colleges, and the National Institute for Adult and Continuing Education to develop this package. They are supportive of this additional offer and we will continue to work with them on the detail.

The Government will ensure that potential adult learners who are eligible have the clear information they need about 24+ advanced learning loans. Alongside this, we will align our other resources, such as capital funding, to ensure we can maintain and grow participation in STEM programmes—through investment in infrastructure to provide the tools for learning, and stop costs rising—working with the Sector Capital Group to determine the best means of doing so. It is vital that we continue to drive sustainable growth as well as social mobility.

The existing policy, inherited from the previous Administration, requires the student to contribute in cash before they start the course; loans will ensure that fees are no longer a barrier to access. We want to build an FE system fit for purpose for the future and loans in FE will help to deliver capacity. In a tighter spending environment, it is right to focus available funds on 19 to 24-year-olds who did not complete their education at school, those without basic skills, and those seeking employment; and it is right to maintain access to learning for people outside these groups.

Colleges and training organisations are preparing now, so that as many adults as possible can benefit from 24+ advanced learning loans when the application system opens on 1 April 2013. I urge you to give the sector your support, as I have given my own, as they manage this important change.