Talking to students about loans - Advanced Learner Loan

The following guide was originally created for the launch of the Advanced Learner Loans and contains some handy information to help when talking to Learners about funding and the Advanced Learner Loan.

Talking to learners: a guide

This guide includes key pointers and information to help you when engaging learners in conversations about the loans. You may be unclear about what you should and shouldn’t say to learners about accessing an Advanced Learner Loan to pay for course fees.

Know what the law says

By virtue of the Sale of Student Loans Act, the Advanced Learner Loan is not regulated by either the Consumer Credit Act or the Financial Services and Markets Act. This means Advanced Learner Loan isn’t bound by the Consumer Credit Act – the law that protects people when they are entering into a loan agreement – as the rates of interest involved are too low. Staff who talk to people about the loan don’t need to be authorised by the Financial Services Authority, but they do need to make sure that what they say doesn’t creep into the regulated area of ‘financial advice’.

This means that you should not offer a learner guidance, advice or recommendations about how suitable an Advanced Learner Loan might be for them based on their personal circumstances. The loan should be presented as one of the options a learner can take when deciding how to fund their studies.

You should help the learner to make a decision, not make a decision for them

This is the key point to note for all FE practitioners who may have conversations with learners about the Advanced Learner Loan. Your role is to present the learner with the information and advice they need to make their own decision about the best way to fund their course. You should not tell them what you think is the best way for them to fund their course - they must make their own decision based on the information you present to them.

Signpost people to other sources of advice

It’s important to stress to the learner that they should consider all of the options available to them before taking out any loan. If a learner wants advice on managing their finances, they can get impartial money advice from the Money Advice Service website or on 0300 500 5000.

There are also resources on the National Careers Service website that can help learners think about their options, for example, the ‘guide to funding your learning and using financial products like the Advanced Learner Loan’

Remember that you are not a finance expert

You should make it clear to learners that you are not a finance expert. Ensure that you aren’t seen to claim expertise in financial products, such as mortgages or loans.

Be clear about the features of the Advanced Learner Loan

Although it’s important not to be seen to ‘sell’ or recommend the loan above other options, you should explain all of its features. Ensure that the learner is clear about:

• who is eligible for an Advanced Learner Loan,
• repayment thresholds, highlighting that you only repay the loan once you’ve finished your course and you’re earning more than £21,000 a year,
• repayments being linked to how much you earn, not how much you borrowed,
• the interest rate, and the fact that interest will be added to the loan as soon as it starts being paid to the college or training organisation; and
• the fact there is no credit check and household income isn’t taken into account.

Some suggested wording to include in learner communications

Below is some suggested wording you may wish to use to inform learners of their responsibilities and what your role is as a college or training organisation:

It’s important you consider your own circumstances and look into all options for paying for your course before choosing to take out an Advanced Learner Loan. This is not the responsibility of your college or training organisation. If you want advice on managing your finances, you can get impartial money advice from the Money Advice Service at moneyadviceservice.org.uk. There's also information on the National Careers Service website to help you consider all your options when thinking about a course funded through an Advanced Learner Loan.