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£1bn FE loans underspend revealed

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A massive 58 percent of FE loans funding – amounting to almost £1 billion – has not been spent since 2013, FE Week can reveal.

The Student Loans Company, which processes advanced learner loans on behalf of the Education and Skills Funding Agency, revealed that just £652 million in loan-funded provision had actually been delivered since 2013, against a massive £1.56 billion in allocations.

There has also been a near-40-percent fall in the numbers of level three and four learners since the loans were introduced, sparking dire warnings across the sector.

Gordon Marsden described the figures as “extremely concerning” ….. “We are going to need the contribution of older people reskilling to keep our economy afloat,” he added, and called on the government to “look urgently at what can done”.

David Hughes, the chief executive of the Association of Colleges, said that demand for FE loans had been “lower than expected”, leading to a “big drop” in adults studying at levels three and four. “The government should be worried about that impact, particularly at this time when skills gaps are growing for many employers,” he warned.

FE loans, originally known as 24+ loans, were introduced in 2013/14 for learners studying courses at levels three or four and aged 24 and older. Despite this persistent under-delivery, loan eligibility was expanded in 2016/17 to include 19- to 23-year-olds, and courses at levels five and six.

FE Week asked the Department for Education why its loan policy was underperforming so badly, and what action it was taking to address the problem.

“We continue to work with the sector to raise awareness of advanced learner loans, which offer important help with the costs of a course at a college or training provider, allowing more people to study and gain new skills,” said a spokesperson.

FE Week understand that colleges and private training providers as groups have both increased the total amount of loans-funded provision they’ve delivered since 2013 – but that private providers increased their delivery at a much faster rate.

In 2013/14 colleges delivered loans-funded provision worth £99.8 million, but by 2016/17 this had gone up to £112.2 million – an increase of £12.4 million or 12.4 percent.

Meanwhile, private providers delivered loans-funded provision worth £9.4 million in 2013/14, but by 2016/17 this had risen to £78.8 million – a far chunkier increase of £69.5 million, or 640 percent.

Qualifi’s regulated vocationally related qualifications at Level 3 to Level 6 inclusive are Advanced Learner Loan recognised, providing a means by which providers can encourage and support their local community of learners to access learning and progress into higher education. To become an approved Qualifi centre please visit our website at