As far as I can tell, stats to go up marginally when you loan youngsters out, but it my games it's never by a great margin.
For example, in one of my saves, I signed Sean Geddes from Walsall in my first season as Dundee United manager. He had a predicted ability of four stars (he was currently at one). So I sent him out on loan for two and a half of my first three seasons (first at East Fife, then Brighton, then Reading, before coming back and playing about ten games for me), and by the start of the fourth season, he'd only grown to by half a star.
I don't know why the growth was so little, as he was getting regular games at each club, and all bar East Fife were playing at a relatively good level. The only reason I can think of is that in those four seasons, I'd gone from a mid-table SPL side to regular in the CL knock-out stages, so maybe the star system has changed?