Becoming a lawyer is expensive, but if you think it’s worth it, there are a variety of funding options
After graduating from university with tens of thousands of pounds of debt, depending on your mindset law school can either seem like a dizzying extra expense or ‘in for a penny, in for a pound’.
But instead of panicking or resigning yourself to £10,000 to £20,000 of debt, it is worth considering all your options.
The first thing to consider is if attending law school is worth it, full stop. Law school is not an extension of university. The Legal Practice Course (LPC) and Bar Professional Training Course (BPTC) are professional exams designed to equip students with certain skills they will use in their chosen profession.
You need to be honest with yourself about your job prospects. If you do not already have a training contract or pupillage sorted out, your choice might still be a gamble, but you can make sure it is not a foolish one. Your grades from A-level onwards, including all of your modules at university and the amount of work experience you have racked up, will be key in deciding this.
You need to do your research properly. Do not just rely on the vagaries of what each profession as a whole requires. Instead, ask yourself what type of firm or chambers that you want to work for and find out their entry requirements.
For future solicitors, the funding options are slightly more simple than for barristers. If you have secured a training contract at a City or large regional firm then congratulations, your struggle is over. Nearly all of these firms will pay for your Graduate Diploma in Law (GDL) and LPC and the vast majority also pay a grant to easily cover a year’s rent. It will be up to you to fund your living expenses, though.
If you are heading to a high street firm or have yet to secure a training contract at a large firm, then funding your LPC will be down to you. Law schools do offer various scholarships, but not everybody can bag one and you will probably need to make a trip to the bank.
Career Development Loans have now been replaced by Professional and Career Development Loans, available through an arrangement between the Young Person’s Learning Agency and participating banks (Barclays and the Co-operative). These loans are suitable for the BPTC and LPC but do not cover the GDL conversion course because it leads to another course rather than employment.
This type of loan is essentially a Government subsidy administered by a bank. The Young People’s Learning Agency pays the interest accrued during your course and for one month afterwards and a repayment holiday also applies for this time.
It is only possible to borrow between £300 and £10,000 through this scheme, so it will not cover all fees and you will need to find another source of finance in addition. Another drawback is that after the interest-free period, rates can climb to about 9.9 per cent APR.
Initial information from banks may show a lower rate but this is calculated from the entire period the loan covers, including the subsidised interest-free period.
This hike in interest can be avoided by switching the debt to a personal loan after the repayment holiday ends but before high rates begin. However, before embarking on this plan, check the early repayment conditions of your loan.
BPP Law School offers its own version of the Professional and Career Development Loan, suitable for both prospective solicitors and barristers. It has partnered with Investec and offers all students a loan of up to £25,000, on which interest accrues from the start of the loan rather than the end of the course.
For prospective barristers, the situation is a little more complex. An advance on pupillage, or ‘drawdown’, can make all the difference. This relies on three factors, however. First, you must have secured a pupillage before you start the BPTC.
Second, that pupillage must be at the better-paid end of the spectrum – the Bar Standards Board minimum salary for pupillages is £12,000, but many pay more: up to £65,000 at the more lucrative chambers.
Third, the chambers in question has to permit this, and not all do. Pupillages start with the legal year in October and any application for drawdown needs to be made one year before you are due to start.
If drawdown is not an option then a Professional and Career Development Loan or HSBC’s bar loan may be the answer.
If you have obtained a BPTC place and applied for an award at your chosen Inn there is also the option to apply for an HSBC bar loan. The Inns of Court and the Bar Council set up this mechanism with the bank in 2008 to provide a loan of up to £25,000.
If you satisfy HSBC’s credit requirements and your principal account is with the bank for the duration of the loan, HSBC will lend without arrangement fees, with a repayment holiday for 18 months for full-time students and 30 months for those studying part time. Interest at 7 per cent above HSBC’s base rate will accrue throughout the loan though, including months spent studying.