In theory, the combination of England’s new “lifelong loan entitlement” (LLE) and the promised introduction of funding for sub-degree modules will make it easier for people to access learning more flexibly, spacing out their studies and potentially earning while they acquire new skills.
Since 2012-13, English students have been eligible for income-contingent loans only if they are studying at an intensity of 25 per cent or greater of a full-time equivalent course and are following a full course for a specified qualification. Academic research and evidence submitted to the Augar review indicate that this has been an important factor in the decline in the number of part-time adult learners.?
But there is a danger that the LLE, which the is paving the way towards, ends up a missed opportunity. One big reason for that is that the Treasury is tempted to water down the promised skills “revolution” by retaining the Equivalent or Lower Qualification rule (ELQ).?
The rule prevents those studying for a second higher education course at an equivalent or lower level to their first from receiving either fee loans or maintenance support, on the grounds that limited funding should be reserved for first-time students.?
The trouble is that the rule – which doesn’t exist in similar systems, such as Canada or Australia – treats tertiary education as a one-off event in a world in which people can expect to have multiple careers over their working lives. This runs directly counter to the LLE’s objectives.
My contention is that the economic costs of making retraining difficult will outweigh any savings on subsidies in the student loan book. We need a serious economic impact analysis of the ELQ rule before we can consider the secondary legislation on the LLE.
Since the rule was introduced in 2008, various governments have in effect acknowledged its flaws by peppering it with ever more complicated exceptions. Augar, in 2019, rightly recommended that the ELQ rule should be scrapped for those taking out loans for courses at .?
The government’s reluctance would seem to stem from two things. First, the Treasury’s flawed conception of a course’s value for money, which crudely equates it?to loan repayment rates. Second, an entirely misplaced faith in Whitehall’s ability to predict the skills needs of the economy.?
This short-sightedness is already at work in restrictions on which courses can be accessed through the new Lifetime Skills Guarantee, which offers funding for those aged 19 or over who do not already have a?full level 3 qualification. The list of 400 eligible qualifications is based principally on wage returns, and it is striking that it includes not one creative arts and design course.
My fear is that the government now plans to use the legislation’s fine print to defund level 4-6 courses with lower rates of repayment (via a possible mix of student number controls, lower tuition fees and tougher minimum entry requirements).?
Again, this would hit arts and design courses. These fuel creative industries that were growing two-and-a-half times faster than the overall economy in the decade pre-Covid, generating enough tax revenue to repay the subsidy in the loan book many times over.
The government is under the misapprehension that such courses have grown like Japanese knotweed since the removal of student number controls, absorbing an ever greater share of precious subsidy in the loan book. This is incorrect. Between 2014-15 and 2019-20, they have grown 12 per cent, exactly in line with overall student numbers.?
So we also need a proper economic impact analysis of creative arts education. Policy is being driven by misconceptions and prejudices that are damaging our education system and harming one of the most dynamic and globally competitive sectors of the UK economy.?
Fixing some features of the loan system, such as the high repayment threshold (currently ?27,295), would be a far better way to save costs than constraining student choice and stifling education for the creative industries and socially valuable but lower earning professions.
Lord?Johnson is a former UK minister for universities, science, research and innovation. This is an edited version of a speech he gave in the House of Lords on 21 July.
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Print headline:?Scrap ELQ for true progress
