Who pays for degree apprenticeships?

Find out what funding is available for degree apprenticeships.

Who pays for degree apprenticeships?

Girl with school bag

Degree apprenticeships are really popular with universities, businesses and individuals alike. Universities expand their student population and revenue streams... employers develop high-level skills in their business... and students get the opportunity to gain a degree-level qualification without paying university fees.

Unlike traditional undergraduate degrees, students don’t have to take out a loan to pay their fees – so how are degree apprenticeships funded?

The quick answer is: the employer – but there is loads of funding available to employers to cover the cost of degree apprenticeships.

How much do degree apprenticeships cost?

The cost of degree apprenticeship training depends on the level and sector, but can range from £4,000 to £27,000. Each degree apprenticeship standard has maximum funding band which represents the maximum amount you should expect to pay for the training.

If you pay the levy...

If you have an annual payroll over £3 million per year, you’ll be contributing to the apprenticeship levy every month, and can use these funds to pay for apprenticeship training. Each month’s levy contribution must be used within 24 months otherwise it’s removed from your Apprenticeship Service (AS) account – so you’ve got to use it or lose it!

Although levy-paying employers have to use their levy funds to cover the full cost of the apprenticeship, these funds are being taken each month anyway, so you might as well use the funds to develop high-level skills in your business.

If you don’t pay the levy...

If you’re an SME with an annual payroll of less than £3 million, the Government will pay for 95% of apprenticeship training, and you’ll pay the remaining 5%. For example, for a degree apprenticeship with the maximum funding cap of £27,000, the employer will only have to contribute £1,350. This contribution will need to be paid in full to comply with ESFA (Education and Skills Funding Agency) funding rules.

If you have less than 50 employees...

Employers with less than 50 people working for them can train 16-18-year-old apprentices without having to contribute towards the cost of training. Instead, the Government will pay 100% of the training costs directly to the training provider.

Additional payments available...

Both levy and non-levy paying employers can also benefit from additional payments to support apprentices in the workplace. If you recruit an apprentice aged 16-18, or an apprentice aged up to 24 who has previously been in care or has a Local Authority Education, Health and Care Plan, you’ll receive an additional payment of £1,000.

Most universities use an apprenticeship software to support their delivery, so employers can log in to monitor their apprentices’ progress, collaborate with tutors and provide feedback.

The most popular degree apprenticeship software is OneFile. OneFile is used by over 30 UK universities and half the top 10 degree apprenticeship providers – including The Open University, QA, Manchester Metropolitan University and London South Bank University.

We’re extremely happy with OneFile – the software works for our needs and our customer success manager goes above and beyond to support us!”

Ben Campbell, University of Law

To find out more about degree apprenticeships and how OneFile works, download your ultimate guide to degree apprenticeships.

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This article includes research and opinion sourced by OneFile at the time of publication. Things may have changed since then,
so this research is to be used at the reader's discretion. OneFile is not liable for any action taken based on this research.