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Estimated loan outlay at private providers – 2014/15 & 2015/16

February 10, 2014

On Friday I wrote a swift blog about a written answer provided by David Willetts about estimated ‘cash expenditure’ to students at private providers in coming years.

Willetts’s statement read:

The estimated cash expenditure by financial year is (i) £400 million in 2013-14 and (ii) £600 million in 2014-15. We do not estimate a specific RAB charge for students at private colleges. Our current estimate of the RAB charge across all full-time undergraduates is around 40%.

I’ve since clarified with the BIS press office that these figures relate to total loan outlay per year for tuition fees and maintenance. As noted, this represents large expansion given that the equivalent figures for 2011/12 and 2012/13, were roughly £90m and £250m respectively.
A couple of things to note:
  1. Many of the students supported in this way will be studying lower level undergraduate qualifications such as HNC (level 4) and HND (level 5), rather than full undergraduate degrees (level 6). It is probably unreasonable to attribute the same estimate of non-repayment (40%) for these loans: all things being equal, non-repayment should be significantly higher.  Even accepting that lower ‘RAB’ figure, the government is subsidising those loans to the tune of £160m in 2014/15 and £240m in 2015/16.
  2. There is no mention of maintenance grants. Last year maintenance grants were £90m, assuming similar expansion that figure should increase to £140m and then £215m. Since grants are entirely expenditure, the total expenditure subsidy to those students would be £300m in 2014/15 and £455m in 2015/16.
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