This guide provides basic details of how the Student Loans System operates for adults in Further Education.
The decision to take a further education loan is entirely for the individual and they may wish to take careers and financial advice before doing so.
Union Learning Representatives are recommended to consider alternative funding options with the learner including employer investment and collective learning funds.
Who are the loans for?
Learners aged 24 and over, studying at Level 3 or Level 4, including QCF Certificates and Diplomas, Access to HE and A-Levels.
NB Learners aged 23 and under continue to receive public subsidy for learning in further education at level 3 and 4 and therefore are not eligible for the loan. However, the government has recently announced that learners aged 19-23 will be eligible to apply for a loan from the beginning of May 2016 for any eligible course beginning on or after 1 August 2016 (this section of the website will be fully updated in May 2016 to reflect this change).
The loan is not means tested or credit checked. The learner must be be living in the UK on the first day of the course and have lived in the UK, Channel Islands or the Isle of Man for three years immediately before starting your course.
Which training providers are eligible to receive funding from a further education loan?
Designated FE colleges or via a training organisation or directly with a major employer.
How much can be loaned?
The loan value will be up to the equivalent of the fully funded rate for that qualification set by the Skills Funding Agency. Loan rates are likely to range between £300 and £5,000 and reviewed annually.
What if a learner makes a wrong choice of study?
The student loans system will allow one repeat loan for a "wrong choice" and further repeat loans due to compelling personal reasons.
When does the learner pay back?
Loan repayment will only start once the learner has finished their qualification and is earning more than £21,000 a year. If the learner's earnings drop below £21,000, payments will cease. There will be a mechanism for voluntary repayments in place until 2016.
What are the interest rates?
Interest rates are accrued from the moment the loan is paid out at per cent interest rate. Once the learner is earning, interest rates are accrued at the following rates.
|Your situation||Interest rate|
|While you study and until the April after you finish or leave your course||RPI plus 3%|
|If you finish or leave your course before April 2016||RPI plus 3% (then RPI from the April after you finish or leave your course)|
|From the April after you finish or leave your course||RPI|
What are the repayment rates?
The repayment rates depend upon salary after completion of the course: you pay 9 per cent of any income over £21,000 a year – see the table below for examples:
|Your yearly income (before tax)||Your monthly income (before tax)||Monthly repayments|
|Up to £21,000||£1,750||£0|
Is there anything else I should know?
Colleges are supported by the Government to provide bursaries to support particular needs such as childcare support, which is targeted at the college's discretion. Student Finance England will 'write off' any outstanding 24+ Advanced Learning Loans you owe for an Access to HE course once you complete a higher education course. Advanced and higher level apprenticeships were previously subject to loan support only for the adults of 24 years and over, but the government has decided to reinstate public funding support for this age group after poor take up and wrote off existing loans.