Autumn Statement: student loans for the LPC?

On 3 December 2014, the Chancellor of the Exchequer released his annual Autumn Statement, which may have huge, perhaps unintended, implications for the graduate legal market. In particular, the Junior Lawyers Division (JLD) has highlighted that the introduction (from 2016) of income-contingent loans of up to £10,000 for postgraduate taught master’s programmes for students under 30. Essentially, an extension of the existing student loans system for undergraduate studies. While details are unclear, we have concluded that this is likely to cover the LPC in one form or another.

Natural extension

If you read the 108-page document, you may ask how we came to this conclusion from a single paragraph? A fairly uncontentious assumption would be that the LLM is a postgraduate taught master’s programme. It is only a natural extension of this assumption that the combined LLM-LPC (common at BPP and the University of Law) will also fall into this category. We hope that the standalone LPC will qualify for this loan, but that may be going too far.

The JLD has thought about the issues this raises, and ultimately welcomes the news. The key driver behind this policy is social mobility. Increasing access to the profession is something the Law Society and the JLD are constantly campaigning for. By introducing flexible LPC funding methods, students will be able to meet the LPC fees (often in excess of £10,000) without a forced break in their studies, or taking out an onerous commercial loan which is paid back within months of graduating (by way of reminder, these government student loans only start to be paid back once the individual is earning above £21,000 per annum). This will help not just the most economically disadvantaged in society, but also the ‘middle income’ band – those students who do not qualify for bursaries and grants, yet cannot rely on parental funding.

Equivalent means

Of course, there are counter arguments. The JLD is well aware that there are already far more LPC graduates than training contracts. A rising number of LPC graduates would just make this situation worse. Further, we may be encouraging students who are unsure about their future to take the LPC without really committing to a career in law, which would just pile more debt onto an already jaw-dropping figure at the end of a law degree.

But even if LPC graduates are forced to take a paralegal role due to the under-supply of training contracts, savvy individuals may look at the new SRA ‘equivalent means’ qualification route, and consider qualifying via this method.

Granted, an increase in LPC graduates does not necessarily mean an increase in training contracts. The option to take the necessary steps to qualify as a solicitor must be open to all. Of course, students should be made aware of the competition before taking the LPC. But with the introduction of the equivalent means qualification route, perhaps an over-supply of LPC graduates is yesterday’s problem. SJ

Charlotte Parkinson is the student representative on the JLD Executive Committee and a paralegal at Stewarts Law in Leeds