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Advanced Learning Loans Employers Information

Do you have employees over 24 years who are thinking about studying for a course at level 3 and above?
They may be able to apply for the new Advanced Learning Loans to help with the cost of their course. .

What is the Advanced Learning Loan?

The new Advanced Learning loan is the government's non-means tested or credit checked helping hand for anyone over 24 years wanting to study for a Level 3 qualication such as a National Certicate/Diploma or a higher or advanced apprenticeship.

Can anyone apply?

Yes, as long as your employee starts the course on or after 1st August 2013 and has ordinarily been a resident in the UK/EU for at least three years before the start date.

How does the loan work?

Only one application is necessary for a course even if it is longer than one year. Loans are not available to repeat the same level of course.

How much can someone get?

The minimum is £300 and it depends on the individual if they want to apply for the full cost of their course.

How is it paid back?

Loan repayments will only start when an individual has left their course and is earning more than £21,000 a year. Repayments are set at 9% of income above the threshold and there will be a single payment irrespective of the number of loans an individual has taken out. Any outstanding balance will be written off after 30 years.

How to apply for a loan.

Applications can be made online.

As an employer could I be accused of age discrimination by expecting my employees who are aged over 24 to take out a loan?

Responsibility for justifying the different funding arrangements pre/post-24 will lie with the Government, rather than individual employers. The difference of treatment on the basis of age does not contravene the Equalities Act 2010 if the policy can be objectively justifed.

Can I repay the loan for my employee?

Yes. Employers can make individual agreements with their employees about loan repayment.

What are the tax consequences if I choose to make loan repayments on behalf of my employee?

The tax treatment is the same as for any other type of loan. The amount paid off is subject to tax and National Insurance Contributions as employment income in the hands of the employee.

My employees are not likely to earn more than £21,000, is that a problem?

No. It is not expected that everyone who takes out a loan will repay it straight away and loans are written off after 30 years.

My employees are earning more than £21,000 now, will they have to repay straight away?

People will not have to repay until after they have finished their course and are earning over£21,000. No repayments will be made via the tax system until after April 2016 although voluntary repayments can be made at any stage.

I am an apprenticeship employer – can I repay the loan for my apprentice?

Yes. Employers can make individual agreements with their employees about loan repayment. Employers will be given support from the National Apprenticeship Service to help employees aged 24 and over wishing to undertake an Advanced or Higher Apprenticeship using a loan.

If an apprentice is made redundant and cannot find another employer to complete the framework what will happen about the loan?

If an apprentice cannot find alternative employment they will be liable for all loan repayments until the point of withdrawal from the college or training provider.

Will the loan to the employee take account of my employer contribution?

Yes. The maximum loan amount for an apprentice is 50% of the cost of the Apprenticeship. This reflects the expected contribution from you as their employer. The employer contribution can be made either in cash or in kind.

Our UK Provider Number is: 10007938

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