Analysis (Tang & Worth, 2024) by the National Foundation for Educational Research (NFER) has modelled the likely impact of introducing such a scheme for all teachers in their first 10 years at the chalkface.
Known as a teacher student loan reimbursement, the policy would see the government paying back the amount of money paid by teachers in the previous financial year for their student loan repayments.
In 2018, the Department for Education (DfE) piloted such a scheme for state school teachers in certain shortgae subjects and the analysis draws on these findings.
The NFER analysis estimates that after one year of the scheme there could be around 2,100 additional teachers, “who would have been expected to otherwise leave teaching in the state sector if there was no teacher student loan reimbursement scheme”.
This is based on mean estimates of the impact of the DfE’s 2018 pilot and the analysis suggests the impact could be as low a 900 additional teachers and as high as 3,000 additional teachers in a year depending on which esimate is used.
With teachers facing student loan payments of up to £25,000 to £27,000 a year, the cost of such a scheme, the analysis estimates would be around £245m in 2025/26, which is around the total amount currently spent on teacher training bursaries in priority subjects.
This equates to around £12,500 per additional teacher, per-year, although costs would likely rise over time due to recent changes in student loan repayment rules and as more teachers entered training.
This is similar to the cost per additional teacher, per-year of early career retention payments and of high-level busaries (£30,000).
However, the use of bursaries was found to be more cost-effective as a recruitment and retention strategy than teacher student loan reimbursements and early career retention payments when it comes to subjects that do not have existing bursaries in place or have low-level bursaries of around £10,000 – in these cases the use of a bursary strategy would cost £9,000 to £10,000 per additional teacher, per-year.
The report states: “The cost per additional teacher-year gained was lowest for bursaries, where a subject had no existing bursary or where the existing bursary was low. This suggests that a policy approach of first raising bursaries where they are low is likely to be most cost-effective.”
However, it adds: “In terms of value for money, our modelling shows that a (reimbursement) scheme is comparable to the other financial incentives – namely bursaries and early career retention payments – over the long term.”
It concludes: “Government should carefully consider the merits of introducing a (reimbursement) scheme as part of its teacher recruitment and retention strategy. Where bursaries are zero or low for subjects this is likely to be the most effective policy to implement. A (reimburse
ment) scheme could be considered alongside early career retention payments for subjects or phases where bursaries are already high.”
Sarah Tang, an economist in NFER’s Centre for Policy and Practice Research and co-author of the study, said: “Our analysis shows that introducing a new teacher student loan reimbursement scheme could be an efficient policy for improving teacher supply through encouraging more teachers to remain in the profession. Especially for shortage subjects where bursaries are already high, a reimbursement scheme could be considered as part of a broad teacher recruitment and retention strategy.”
The study was commissioned by the National Association of School-Based Teacher Trainers (NASBTT) and the Universities’ Council for the Education of Teachers.
Emma Hollis, NASBTT chief executive, said: “The publication of NFER’s analysis is a huge step forward in making the case for a serious policy discussion and we welcome the findings. We look forward to feeding the findings of this work into DfE and moving the conversation forward.”
- Tang & Worth: Policy analysis of student loan reimbursements for improving teacher retention, NFER, 2024: www.nfer.ac.uk/publications/policy-analysis-of-student-loan-reimbursements-for-improving-teacher-retention