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Archive for July 6th, 2011

 

If you have time… this excellent post from former barrister Amanda Bancroft ( @_Millymoo on Twitter ) is a good read : I heard the news today, oh boy!

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I have just received this interesting Press Release (which I quote in full) from BPP Law School.

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First for BPP and Investec with launch of exclusive student loan for law students
5 year fixed interest loan for course fees and living expenses

BPP and specialist bank Investec today introduced the Law Loan which will be available exclusively to BPP students from Wednesday 6th July.  The initiative was developed in response to student feedback where funding was cited as the number one barrier to studying law. The loan will be available to full-time UK students after accepting and enrolling on a place to study the Graduate Diploma in Law, Legal Practice Course or Bar Professional Training Course at any of BPP’s eight city centre locations across the UK.  The details are as follows:

  • Maximum loan value will be £25,000 per student; minimum £1,000.
  • 5 year fixed interest rate of 9.5% (APR 9.9%*)
  • Students will be able to apply for an amount to cover all or part of their course fees, plus living expenses of up to 20% of the cost of the course.
  • Monthly repayment instalments
  • Repayment holiday of 18 months from start date of the loan
  • An arrangement fee of £250 will be applied at the outset to the loan amount
  • Available for Graduate Diploma in Law (GDL); Legal Practice Course (LPC) and Bar Professional Training Course (BPTC).
  • No early repayment fees

 Peter Crisp, Chief Executive and Dean of BPP Law School said: “We are pleased to be working with a highly regarded financial organisation such as Investec, and this initiative will be welcome news to students.  BPP is committed to supporting students as much as we can, and in addition to our scholarship programme, we are always looking for ways in which we can help train our future lawyers”.

Roy Beddows, Investec Bank, said: “We are delighted to be able to offer this facility exclusively to BPP students. The Law Loan has been designed to address the key funding requirements facing many law students and combines a competitive rate with a high degree of flexibility.  We hope that the Law Loan will enable those students who have previously been dissuaded from studying law because of lack of funding to review their decision and apply to BPP.”

Students who want to find out more should contact www.bpp.com/lawloan or www.investec.co.uk/lawloan

Given that some banks have pulled out of the loan market for law students, this is certainly an interesting development.  What will The College of Law (and other providers) do now?  I shall have to ask them.  What if students default in repayment?  Will BPP be liable to Investec – or will Investec take the hit, assuming that normal credit enforcement  recovery procedures fail in the event of default?   Will a student be in a position to start repaying after the eighteen month repayment holiday?  What if a GDL student takes out a loan?  The GDL and LPC takes two academic years (ish). Seems, on the bare facts above – hence my preparedness to quote a press release in full – to be a reasonably good deal?

Certainly 9.5% (APR 9.9%*) is a good return for BPP / Investec at present Bank  Rate?  Given that BPP students tend, in the main,  to come from Russell Group or other good universities, tend to pass the exams, tend to be of interest to employers – the risk to Investec will be fairly low?  Your thoughts on this, most welcome, as always.

 

A commenter on Legal Week pointed out…

Old Rope

9.5%! You beauty!

If you borrow £20,000, then during your payment holiday your principal has ballooned to nearly £23,000 (note it is a payment holiday, not an interest holiday).

Compound interest will kill you -06 Jul 2011 | 16:16

I have emailed Peter Crisp for his answer on my point about BPP liability in the (unlikely) event that a student defaults on the loan.

My podcast with Peter Crisp last week:  Lawcast 188: Peter Crisp, Dean of BPP Law School – Funding and privatisation of legal education

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The College of Law tweeted that they are still in discussions with banks and provided a link to current arrangements.

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