What does the Government’s response to the Augar Review mean for widening participation in higher education? Part three: Lifelong Loan Entitlement

Posted in: Augar Review, Business and the labour market, Economics, Education, UK politics

Dr Matt Dickson is Reader in Public Policy and research lead on widening participation in higher education in the Institute for Policy Research (IPR) at the University of Bath. 

The first blogs in this mini-series looked at how some of the key policies in the Government’s response to the Augar Review might affect efforts to widen access to and success in higher education (HE). In this final blog we look at another flagship policy in the response, namely the Lifelong Loan Entitlement (LLE), and what that may do for the future of post-18 education and training.

Perhaps partly because of the uncertainty over the details of the LLE, it is not the area that has received the most attention since the Government announced its response, with most of the focus and headlines going on the reforms to HE finance and access. But this also again reflects the bias in the post-18 system towards the well-known HE route that is very familiar to most people and certainly to the policymakers, journalists, think-tanks and academics working in this space.

However, this bias could be about to change, with the potential for the LLE to revolutionise the post-18 system and finally put Further Education (FE) and training at Levels 4 and 5 on an equal footing with the familiar HE route to an undergraduate degree. It is notable that the reaction to the LLE announcement has been almost universally positive and there is a great deal of optimism and excitement about the possibilities it opens up. Philip Augar himself described the LLE as an immense opportunity for the 50% of people who do not go down the traditional HE route, and as the way to get FE rebooted, noting that this could be transformative for the economy and society.

But before we think further about the possibilities, the first thing to note is that there is an awful lot that we don’t yet know about this policy because, quite wisely, the Government is currently seeking input into the design and implementation of the LLE. Here is what we do know:

  • The LLE will be worth the equivalent of four years of post-18 education, to be used over a person’s lifetime (i.e. £37,000 in today’s fees);
  • fees for both individual modules and full years of study at higher technical and degree levels (Levels 4 to 6) will be eligible to be paid for by the LLE whether they are undertaken in colleges or universities;
  • each individual will have an associated Lifelong Learning Account keeping track of how much of their LLE they have used;
  • eligibility for maintenance support will be extended to learners undertaking Level 4 and Level 5 courses, and those doing Level 6 higher technical courses, not just traditional undergraduate degrees;
  • it is to be introduced from 2025.


The extension of the student finance system of tuition fee and maintenance loans to learners in FE and studying higher technical courses below level 6 puts non-HE training on an equal footing with the traditional degree path in tertiary education. This is long overdue and addresses a huge gap that has existed in the past between successive Government’s rhetoric of creating ‘parity of esteem’ between HE and FE and the mechanics of post-compulsory education finance that relegated non-HE routes to a second-class status.

For school leavers in particular, the choice between an undergraduate degree course that might not be exactly right but that has tuition fees covered by a loan and maintenance loans also available, and an FE course that has at best tuition covered by an Advanced Learner Loan but no other support, distorts the decision-making process. The danger is that the financial aspects become the key consideration rather than what the young person would actually prefer to do. This distortion is likely to be more acute for those from less advantaged backgrounds, and no doubt contributes to the sub-optimal choices that we see some people make to pursue HE.

As our previous research has shown, some young people elect to go to HE and enroll on courses that do not result in positive earnings or employment outcomes compared to similarly qualified individuals who do not go on to HE. Part of this is down to the course chosen – we show that there were degree choices available that would have had a good return for all those who end up with a poor outcome – and this highlights the importance of information, advice and guidance, something we return to below.

UK graduate employment statistics also suggest that one third of graduates are currently underemployed, which taken with the earnings and employment results, suggests that there are HE entrants who would have been better off choosing a different route in tertiary education but until now those routes have been financially much less attractive. The LLE will hopefully address this, and if it can improve the quality of fit between learner and course it may well raise the returns for some of the so-called ‘low-value’ courses that are the target of student number controls, as discussed in the previous blog. Treating higher and further education as a single post-18 eco-system as the LLE aims to do, may finally start to address the twin challenges of shortages of higher technical skills and mismatch in HE.

What might it mean for widening participation (WP)?

Alongside the introduction of the LLE it is envisaged that traditional academic HE and higher technical training will become much more modularised with learners able to build up credits over time and these credits will accumulate to constitute a traditional level 6 degree qualification or other qualifications at level 4 or 5 – that could then be potentially built upon at a later date up to the full level 6 qualification.

A lot of this provision could come from Higher Education Institutions (HEIs) – this is one area where there is still a lot for the Government consultation and for HEIs themselves to work out – and so there is huge potential for widening the participation in HE for those who would otherwise not have access. As was highlighted in the first blog, the financial support available for learners accessing HE are not adequately covered by the current system, even with a full maintenance loan and especially so without, and so a parental contribution is required. This is undoubtedly a factor that puts students from lower socioeconomic backgrounds off doing a traditional full three-year degree and so allowing higher education to be accessed in stages, and in ways that can fit alongside work, could suddenly open the door to HE for many who would otherwise avoid it despite a desire and ability to undertake qualifications at this level.

Crucially, extending maintenance loans to go alongside the LLE is also on the table, with the consultation looking to decide how best to do this – whether a course worth half the credits of a degree should qualify for half the maintenance loan for example. This eligibility for maintenance as well as tuition fees is important as having fees paid by a loan is one thing but actually being able to afford to undertake this learning is another. Again though, as noted in the first blog, addressing the real costs of undertaking HE will remain a high priority whether the HE is acquired in one go or bit by bit.

What about for older learners?

The stated aim of the LLE is to allow people to train, re-train, upskill and study flexibly throughout their adult lives in response to changes in skill needs and employment patterns. Beyond equalising the finance for options facing school leavers, the potentially revolutionary element of the LLE is the way it is envisaged to work for adults of all ages looking to re-skill to get the higher-level training required to meet the needs of a changing economy.

The LLE will introduce a great deal of flexibility into the system – at present HE is set up to serve predominantly young, full-time undergraduates doing three-year courses. The envisaged development of a more modular system to go alongside the traditional format should allow the extension of HE provision to more adults studying in both HEIs and FE colleges.

Of course, it is unlikely that older learners will elect to do full three or even four-year courses as they may well have families to support and the calculation of the cost against the anticipated earnings uplift alters when measured over a shorter career horizon. However, the system as set out by the Government envisages scenarios in which mature learners take on more modest debts to undertake a small number of modules that give them the specific new skills they need to enhance their careers from where they are.

What will be needed and what still needs to be worked out

There is evidence that there are higher skills gaps in manufacturing and construction, health and social care and more generally there is demand from employers for the sorts of skills provided by higher technical qualifications. What will therefore be crucial is to ensure an alignment between the skills and qualifications that employers are looking for and the menu of courses and modules provided by HE and FE. If we are confident that this is the case, then this should mean that these qualifications are attractive to learners of all ages such that there is a supply of learners willing to take the new offer. This is a similar conclusion to the work we did on raising the participation age to 18 – the key to increasing higher level training will be presenting a menu of options that learners want to engage with and that employers are looking for.

This also highlights the additional need for good quality information, advice and guidance services to support the new suite of provision the Government is envisaging. Providers, employers and individuals need to know what the new offer is, in particular school leavers will need to know about the alternatives to HE that will be on the table. The Connexions and Next Steps services were defunded in 2011 and have subsequently never been replaced, and this shows: recent research with a representative sample of 18-24 year olds showed that only 29% had heard about apprenticeships and other non-HE routes whilst at school, with more than half suggesting that there is not enough resources to help them learn about these alternatives.

There are a lot of details still to be worked out at this stage. The idea of modular courses is built around an assumption that the modules build up to a degree if desired and if not then there are associated qualifications at levels 4 and 5 that can be departure points. In theory this can work but it will require employers and learners to understand what different combinations of modules add up to and some system for verifying that level. If employers can’t do this and people therefore don’t get on in the labour market because of these acquired modules, then it will be a cost with no return.

There is also a question of the inter-operability of the credits and modules from different places, and which institution is conferring the qualification if multiple HEIs and FE colleges were involved in the learning that makes up the qualification. Administratively we do not have a single identifier for the tertiary sector and an individualised learner record that would identify what a student has done, where, when, and what credits were achieved. There are questions as to who should have ownership of that and whether a single institution should be a student’s “home institution” and be in charge of managing the whole learning journey.

But these are issues that can be worked out and the consultation will hopefully provide useful suggestions from the sectors involved. Perhaps the first thing will be to provide modular courses that use the credit systems already in place and come in whole year sizes so that we don’t look to modularise at the 60 credit-point unit straightaway but slowly introduce more flexible forms of academic and higher technical training. With the rollout planned for 2025, there is not a huge amount of time to put everything needed in place, and so it would make sense to start by offering some additional courses in this way, and then build things up.

All in all, the positive enthusiasm for the LLE looks well founded, albeit the detail of how it will be worked out – and how it will be communicated – will be key. There is also the slight alarm bell that the consultation mentions the need to provide the finance for this in a way that does not result in “significant net cost to the taxpayer”, which we know from the existing HE funding system is not an easy ask…

Final thoughts

Drawing this series to a close, there are a number of things that have really stood out in the Government’s response to the Augar Review and that have the potential to affect WP in HE – both in terms of access and successful participation.

The changes to the financial architecture of the system will make the cost of HE much higher for those who go on to lower/middle earnings outcomes in the future and so to the extent that WP students anticipate being in this group, application to HE may be reduced. How the psychological effects of no real interest yet a longer repayment term balance out in affecting desire to take on debt is hard to anticipate, and so the impact on applications of young people from less advantaged backgrounds will not be known for some time.

The potentially much bigger issue here is the inadequacy of student financial support even with a full maintenance loan. While support is so inadequate students from less advantaged backgrounds will be put off and those who do go to HE will likely have to work, reducing study time, and time invested in finding the right employment or next study step, and so those from WP backgrounds are likely to continue to see barriers both to their participation and their successful participation.

The proposals for Minimum Eligibility Requirements (MERs) to access the student finance system and potential Student Number Controls have generated a lot of adverse reaction in the HE sector. However, there is potential in each policy – depending crucially on how they are implemented – to benefit the WP agenda. In particular, requiring a level of attainment at GCSE that opens the door to advanced educational pathways, and is associated with large labour market benefits regardless of HE or not, might help more young people get across a key educational line whilst also enhancing the chances of successful participation amongst those who go on to HE.

Potentially most significant of all in the longer-term is the LLE. If the LLE and the changes in provision that need to operate alongside it can create a system where access to HE is not a one-shot choice at 18 if you want to have financial support, but something that can be accessed flexibly throughout a career, then many from non-traditional HE backgrounds may now find higher level academic training a viable option. There is a lot that needs to happen for this to work out but the desired destination at least looks promising.

All articles posted on this blog give the views of the author(s), and not the position of the IPR, nor of the University of Bath. Learn more about our research on widening participation in higher education, or read more on the Government's response to the Augar Review.

Posted in: Augar Review, Business and the labour market, Economics, Education, UK politics


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