Why the Professional and Career Development Loan cannot deliver fair access

As part of its arguments that there is no need to provide student maintenance loans to DPLP students, the Scottish Government points to the availability of the Professional and Career Development Loan (PCDL) as an alternative source of funding.

The government’s alternative argument, that the new Postgraduate Tuition Fee Loan widens access to the legal profession, is analysed here.

The PCDL is a Westminster government scheme where students obtain commercial loans from one of two approved banks. Interest is at market rates (one bank was quoting 9.9%) but capital repayment is postponed to one month after graduation. Interest payments during the same period are covered by the UK government. From one month after graduation, the loan operates as a normal bank loan and the student is fully liable for repayment.

There have been a number of doubts over whether the PCDL would be open to DPLP students at all. In theory, the scheme does not apply to courses where there is public funding. Recent changes to postgraduate funding (LINK HERE) have made all DPLP students eligible for a small government contribution to fees, in the form of the Postgraduate Tuition Fee Loan (PTFL). It was thought this may take the DPLP outwith the scope of the PCDL.

The Scottish Government has now told the Law Society of Scotland that it has received assurances from the UK Government that DPLP students will still be eligible for the PCDL. This is good news for those for whom a PCDL may be appropriate. But, in contrast to the implied position of the Scottish Government, the PCDL does not represent a solution to the problem of less well-off students being able to afford their DPLP.

So why is the PCDL no help in widening access to the legal profession? In short, because the PCDL is unsuitable for those from less privileged backgrounds.

Firstly, the PCDL is provided by banks as a commercial proposition not as an act of charity. Students that are seen as too risky are not able to get a loan. By definition, this will tend to exclude those who may already be in debt or who have no identifiable resources: that is, those most likely to be unable to afford to support themselves through the year of DPLP study.

Secondly, taking the DPLP represents a gamble for most students. Only a small proportion of law firms, all of which are large commercial firms, make offers of training positions to students at the pre-DPLP stage. The majority of firms recruit either during the DPLP year or from those who have finished the qualification. So most students start the DPLP with no guarantee of job when they complete the course. For students aiming for the less commercial end of the profession – high street firms, criminal defence, human rights or legal aid / law centre work – there is no chance of a pre-DPLP offer. This gamble is a real one: over recent years, there have been a third more DPLP graduates than there have been training contracts, so competition has been brutal and many DPLP graduates have been able to find legal jobs.

For those with well-off, supportive parents, or who can otherwise accept the financial risk involved, the PCDL is an option. For those without these advantages, the financial risks involved in borrowing commercially to fund their DPLP are massive and the consequences of then failing to find a legal job are extremely serious.

Meanwhile, the Scottish Government continues to deny student maintenance loans to DPLP students. These have significant safeguards for financially vulnerable students: including lower interest rates and the deferment of all repayments until an income threshold is met. It is through extending these loans to DPLP students, rather than through touting the unsuitable PCDL, that the Scottish Government can assist less privileged students to complete their legal education and begin to truly widen access to the legal profession.

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