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The Post-18 Review in England: A Story of Two Loans?

  • 4 September 2018

This guest blog has been kindly contributed by Mark Corney, a post-16 education and labour market consultant. 

Income contingent loans are viewed as either a tax liability or personal debt. Viewed as debt, the inclination of stakeholders across post-18 education is to turn fee loans and maintenance loans into teaching grants and maintenance grants.

One fact and one deduction underpin this inclination. First, the terms and conditions of fee loans and maintenance loans across higher education and adult further education are the same. Secondly, debt aversion arising from fee loans must surely mean aversion to maintenance loans.

Voucher Loans, Cash Loans

Fee and maintenance loans may look the same but they are actually rather different. Fee loans are cashless vouchers paid to institutions to cover teaching costs. Maintenance loans are cash payments to cover students’ living costs and lower earnings.

Maintenance Loans in Post-18 Education

A key outcome of the Review of Post-18 Education must be to identify where full-time and part-time maintenance loans can increase participation, retention and achievement when combined with either fee loans or free education. In addition to mode of study, key variables to take account of include:

  • age;
  • level of qualification; and
  • whether achievement is a first or subsequent qualification at the same level.  


Debt aversion arising from fee loans across the higher education and adult further education sectors is understood to increase with age.

But while mature students in higher education are defined as those aged 25 and over, adult learners in further education are defined as 19 and over.

Although not perfect, however, using ‘young adults’ to refer to 17 to 24 year olds in higher education and 19 to 24 year olds in adult further education, and ‘mature students’ for older people in both sectors could assist future debate.

Level of qualification

In prescribed higher education, fee and maintenance loans are available to full-time and part-time students on Level 4 to Level 6 qualifications for both young adults and mature students.

Fee loans are also available for young adults and mature students on Level 4 and Level 6 further education qualifications. But maintenance loans are generally not.  

First qualifications

Fee loans are available to young adults and mature students seeking a first Level 4 to Level 6 qualification studying either full-time or part-time across higher education and adult further education.

For young adults in further education aged 19 to 23 seeking a first full Level 3 – equivalent to A-levels and the new T-levels – education is free. Fee loans are not required. By contrast, mature students in FE are entitled to fee-loans to achieve a first full Level 3 qualification.

Importantly, however, full-time and part-time maintenance loans are not available for young or mature Level 3 students.

Subsequent Qualifications

Part-time fee loans are available in certain areas of prescribed higher education at Levels 4 to 6 to achieve a subsequent qualification at these levels.

Fee loans are also available for young adults and mature students in adult further education seeking subsequent qualifications at Levels 3 to 6.

Limiting Maintenance Loans

Extending the role of maintenance loans or increasing their cash value costs money, however they are scored in the public finances. Initially, therefore, maintenance loans should support up-skilling rather than re-skilling.

Young Adults: Full-Time ‘First’ Level 3 to 6 Education

Level 6

Both fee and maintenance loans are available for young adults on full-time courses in prescribed higher education to a first degree (Level 6). Over 90 per cent of initial entrants into higher education by age 24 study full-time, with about 272,000 aged 17 to 20.

Initial entry into higher education via full-time study, however, tails-off considerably from age 21. An interesting issue is whether debt aversion to fee and maintenance loans – separately – increases from 21 rather than 24.

Levels 4 and 5

If, of course, the problem is the level of debt, young adults could enrol on two-year full-time Level 5 vocational sub-degrees and further education courses instead of three-year Level 6 first degrees.

Currently, however, only 38,000 18 to 24 year olds are on full-time Level 4 and 5 vocational sub-degrees and only a few hundred 19 to 23 year olds might be on first Level 4 and Level 5 further education courses studying full-time, although further education numbers could grow if full-time maintenance loans were to become available.

Level 3

The Government has said T-levels could benefit 19 to 23 year olds without a first full Level 3. A fee loan will not be needed. There is an entitlement to free tuition for 19 to 23 year olds seeking a first full Level 3.

T-levels, however, are full-time Level 3 programmes. It is inconceivable that 19 to 23 year olds will be able to study full-time without access to maintenance support.

And yet, cries of debt aversion – arising from fee loans – could scare policy makers from considering introducing maintenance loans even though fee loans are not needed. The result is likely to be a restricted pipeline to Levels 4 and 5.

Young Adults: Part-Time ‘First’ Level 3 to 6 Education

Levels 4 to 6

The number of initial entrants to higher education below the age of 25 studying part-time is less than 25,000. Participation by young adults on part-time vocational sub-degrees stands at 19,000, only half the number of full-timers and perhaps, 1,000 19 to 23 year olds might be on part-time Levels 4 to 6 further education courses.

Fee loans apply across the board. Maintenance loans for part-time students are available in higher education and should be extended to further education students. Indeed, since debt aversion is lower for young adults than mature students, this is an example of where the introduction of maintenance loans could increase participation – including at Levels 4 and 5 – in the post-18 system.

Level 3

Achievement of a first Level 3 via A-levels and existing vocational Level 3 qualifications by 19 to 23 year olds could be done on a part-time as well as a full-time basis. But just like their counterparts on part-time Levels 4 to 6 higher education and further education courses, they also have costs to cover. It is the combination of free tuition with part-time maintenance loans which could boost first Level 3 achievement and expand the Level 4 and 5 pipeline.

Mature Adults: Full-Time ‘First’ Level 3 to 6 Education

Levels 4 to 6

Initial entry into prescribed higher education through full-time study falls sharply after age 24. To reduce levels of combined fee / maintenance debt associated with full-time first degrees (Level 6), mature students could enrol on accelerated two-year degrees.

Even so, two-year full-time vocational sub-degrees to date have not been an attractive route to lower debt. Only 32,000 mature students are on full-time vocational sub-degrees, 6,000 fewer than younger adults. Meanwhile, about 5,000 mature students are on Level 4 and 5 further education courses, although this number could increase if maintenance loans become available to complement fee loans.

Full-time study is a big commitment for any higher education or further education mature student. In addition to debt aversion from fee loans, mature students with mortgage or rent liabilities could be concerned about having too little to live on. A possible solution is an increase in the value of maintenance loans for full-time mature students.

Mature Adults: Part-Time ‘ First’ Levels 3 to 6 Education

Levels 4 to 6

The fact that the roll-out of maintenance loans for part-time higher education might expand participation by younger adults should cause a pause for thought before turning maintenance loans into maintenance grants for mature students. And so too should the deduction that debt aversion arising fr4om fee loans must mean a similar aversion by mature students to maintenance loans.

Initially at least, the Government should assess whether maintenance loans and fee loans together actually increase participation, retention and achievement. If, however, participation remains static, the logical response would be free part-time first Level 4 to 6 higher education or further education with retained maintenance loans.

Level 3

The House of Lords’ Economic Affairs Committee recommended the extension of free education to a first Level 3 to mature further education students. The proposal has been viewed as a means of increasing the pipeline to Level 4 and 5 vocational degrees.

At present, mature students seeking a first full Level 3 through adult further education have an entitlement to fee loans. Although a shift from loan to grant funding for teaching would certainly tackle debt aversion arising from fee loans, the question is whether lack of support for living costs is a bigger financial barrier than aversion to fee loans.

The independent panel examining post-18 education in England must weigh-up whether achievement at first Level 3 by mature students will be higher through a combination of free education and no maintenance loans or fee-loans with maintenance loans.

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