Would introducing student loan reimbursements be an effective way to encourage more teachers to stay?

Today we have published new analysis, commissioned by the National Association of School-Based Teacher Trainers (NASBTT) and Universities’ Council for the Education of Teachers (UCET), considering the cost effectiveness of one policy option that could be an effective tool for encouraging more teachers to remain in the profession.

Teacher student loan reimbursement (TSLR) is a policy whereby the government pays back the amount of money paid by teachers in the previous academic year for their student loan repayments.

The Department for Education (DfE) piloted a TSLR scheme in 2018 for state sector teachers in certain shortage subjects and in the first 10 years of their teaching career. The evaluation of the pilot found some evidence suggesting that the scheme was associated with a reduction in leaving rates for those eligible. However, the evidence had a high degree of uncertainty, meaning that further research to understand the impact is needed.

Using the estimates from the DfE pilot, we modelled the likely impact of introducing a new TSLR scheme for all teachers in their first 10 years of teaching. We estimated that after one year of the scheme there could be around 2,100 additional teachers. These are teachers who we would have expected to otherwise leave teaching in the state sector if there was no TSLR scheme. The cost of the scheme for one year is around £245 million which is around the total current spend on training bursaries.   

Comparing the cost and impact to other policy options

From the government’s perspective one crucial question is: how does a TSLR scheme compare in terms of cost and impact with respect to other policy options targeted at increasing teacher numbers?

We estimated the cost of a TSLR scheme and then modelled what the increase in teachers might be from instead spending the same money on bursaries or early-career retention payments (ECRPs). Both are known to be effective at improving teacher supply: ECRPs have been shown to improve retention, while our evaluation of bursaries suggested that they improve recruitment and have a long-term positive impact on teacher supply.

We found that when we look over the whole length of teachers’ careers, the increase in teacher supply from a TSLR scheme was similar to that from putting the same amount of money towards an ECRP policy.

Bursary increases appeared to be slightly more effective than both ECRPs and a TSLR scheme where there was no bursary currently. However, the relative cost effectiveness of bursaries diminishes when there are already high bursaries for subjects. The lesson from this is that while bursaries are generally very cost effective, in subjects where there is already a high bursary (e.g. maths and physics currently attract a £28,000 bursary) it is worth focusing on incentivising retention.  

A TSLR scheme could be a useful tool, particularly for shortage subjects

TSLRs also have some quirks that may make policymakers think twice about implementing them. While ECRPs are paid at a flat rate, TSLRs tend to be lower for women and part-time teachers, because they are linked to loan repayments. Because they are linked to loan repayments, the amount of a TSLR is also highly inflexible, whereas ECRPs offer greater flexibility in the payment amount that can be adapted to circumstances.

However, our analysis shows that introducing a new TSLR 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 TSLR scheme could be considered as part of a broad teacher recruitment and retention strategy.