The Lifelong Loan Entitlement (LLE) is a three-sided reform to Level 4-6 higher education funding in England, which will affect students starting courses in autumn 2025.
New applicants
The first, and biggest change, is that every new applicant for a degree or higher-level course (between Level 4 and 6) will get a tuition fee cash entitlement when they enrol.
Under the current rules – put in place fifteen years ago – people get one chance of fee-loan funding for a degree. If they wish to change career and need a second fee-loan through the higher education system, they are barred by the equivalent and lower qualification (ELQ) rule. From 2025, this rule goes.
Students who don’t have a degree will get a loan entitlement worth £37,000. Graduates who’ve already taken out higher education loans will get a residual entitlement, calculated using a method which DfE has not yet explained.
Fee-loans for modules
The second big change is the plan to extend fee-loans to cover modules. This starts in 2025/26 for just modules of Level 4 and 5 courses as a pilot.
Twelve years after student loans were first extended to part-tie courses, the LLE will involve a further extension to smaller units. Not quite micro-credentials but new options for students assuming they find willing higher education providers.
Maintenance support
The third reform is a levelling up of student finance for Level 4 and 5 courses so that this is equivalent in all the main respects to Level 6.
This eliminates a long-standing (prescribed and non-prescribed) differentiation which prevented some HE students from obtaining maintenance support for living costs.
A bit of a puzzle
It is hard to judge the scope of the reform when we cannot see how the residual entitlement works or which rules continue.
And for those managing or running courses, the LLE is still a bit of a puzzle.
Given long lead times in course development and student admissions, most providers will continue to offer the same courses to the same markets in 2025 that they offer now.
Others, though, will innovate.
Many universities, colleges and independent providers don’t have much risk capital to create lots of new courses, but some do. The LLE may bring change where no-one quite expects it.
For the Student Loan Company, it helps rationalise and modernise their English IT systems.
A far from simple system of post-18 education
The LLE replaces the ELQ, levels up Level 4 and accommodates modules. But no-one should pretend it will make state support for post-18 education in England simple.
In monetary terms, the LLE will manage around £10bn in tuition loans for Level 4-6 provision. Around £8bn of maintenance loans will operate alongside the LLLE.
But there will still be student loans operating, namely Level 7-8 postgraduate loans and adult Level 3 fee-loans.
And loans are only one of the ways in which DfE supports post-18 education and training.
At the same time, there is the £1.5bn of grant funding for adult FE courses at Level 3 and below, and the c£2.5bn spent on post-16 apprenticeships (although most will be spent on 18 year-olds and over).
There are also lots of regulators and funding bodies - OfS, SLC, ESFA and ifATE. The number of mayoral combined authorities is growing. We have 10 now and will have 16 by 2025.
These agencies interact with distinct but often complex groups of organisations on the supply side - universities, colleges and independent providers – and with some odd consequences.
To take one example, there are fee limits for higher education courses which will be changed as a result of the LLE bill but there are no limits in terms of student recruitment. There is maintenance support and no number controls.
By contrast, there is barely any support for living costs for adults taking courses at Level 3 or below and there are number controls expressed in cash terms.
And although apprenticeship funding looks like it is uncapped, there is a fixed budget in the background.
Adult Level 3 and below
As a result, we have an odd system which incentivises providers to develop higher level courses but restricts adult learning activity at Level 3 or below.
Those hoping for a high-skilled knowledge economy will justify the different policies. Those contemplating current skills shortages and divisions in our society will seek something different.
The Lifelong Loan Entitlement is an important and helpful change for part of the post-18 education system – Level 4-6 upskilling and reskilling.
But on its own it is not enough for the change our country needs.
There is still much to do on upskilling and reskilling adults at Level 3 and below.
Julian Gravatt is Deputy Chief Executive of the Association of Colleges