Further education students should have access to a range of loans, fee-waivers and grants, according to a learning and skills think-tank.
The support is needed to encourage more students to take up and stay on courses and resolve inequalities between further and higher education students, a report from the Learning and Skills Development Agency says.
The report, Loans for Lifelong Learning , recommends a tiered system of student support in FE based on expected rates of return from different types of courses and qualifications. People studying for qualifications up to levels two or three should be entitled to free tuition, while those studying at higher levels should be entitled to student loans, it says.
The agency argues that loans with a commercial rate of interest should be available for students on courses expected to provide a return on their investment, while those on courses offering less certain employment prospects should have access to government-backed, income-contingent loans, currently offered only to higher education students.
It says grants should also be provided for those on courses unlikely to result in significant financial returns, as well as students on basic-skill programmes, and those preparing for certain public-sector careers.
The report cites the findings of research on financial returns from different levels of study, financial barriers to learning and the impact of debt-aversion on widening participation to back its arguments. It also draws on the views of student-support experts, including Claire Callender, the South Bank University social scientist whose report on student hardship has influenced government thinking on the issue.
Professor Callender argued that loans might be inappropriate for FE students because the economic returns on their qualifications are limited, that others suggested they were viable as part of a broader support system that included grants and fee-waivers.
LSDA research manager Mick Fletcher, who edited the report, said: "If more people are to participate in learning, ways of removing financial barriers must be found."
Offering loans for lifelong learning, similar to those offered to university students, could help to achieve this.
"It is not equitable that undergraduates can access loans, whereas adults in further education cannot. But students must see a tangible benefit in return for the financial risk involved. A 'one size fits all' solution clearly won't work."