Policy Analysis of Student Loan Reimbursements for Improving Teacher Retention

The research was commissioned by the National Association of School-Based Teacher Trainers (NASBTT) and Universities' Council for the Education of Teachers (UCET) to estimate the costs and possible impact on teacher supply of introducing a new Teacher Student Loan Reimbursement (TSLR) scheme. Under a TSLR scheme, the government pays back any student loan repayments a teacher made in the previous year provided they are still teaching in a state school and are in the first ten years of their career. The report presents analysis modelling the possible impact on teacher retention of introducing a TSLR scheme. We also compared the value for money of a TSLR scheme to other financial incentives designed to improve teacher supply, namely bursary increases and early-career retention payments (ECRPs). The research suggests that a TSLR scheme could prove a cost-effective option for policymakers alongside ECRPs, particularly when bursaries are already at a high level. Key findings: (1) Our modelling estimates that introducing a TSLR scheme in 2025/26 for all teachers who are in their first ten years since qualifying would lead to an increase of around 2,100 teachers in the first year of the programme; (2) The cost per additional teacher-year gained was lowest for bursaries, where a subject had no existing bursary (around £9,000) or where the existing bursary was low (around £10,000 per additional teacher-year for an existing bursary of £10,000). This suggests that a policy approach of first raising bursaries where they are low is likely to be most cost effective; and (3) The cost per additional teacher-year gained was similar for TSLRs and ECRPs (around £12,500). Both were also very similar to the cost per additional teacher-year where bursaries are already around £30,000. This suggests that 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.