AA Legal Documents
Law guide

Professional and Career development loan

Contents

Introduction

You may be able to get a Professional and Career Development Loan (PCDL - previously called a Career Development Loan) to help pay for the cost of vocational learning, education or training.

The purpose of the scheme is to encourage you to undertake further learning/training that could enhance your employability which is funded by a loan from a competitive commercial bank at preferential rates agreed with the government. In addition, the government will help to pay towards the cost of repaying the loan.

The Skills Funding Agency will pay the interest on the loan whilst you are studying and up until one month after the course ends.

You must then start repaying the loan once you have stopped studying.

Note that you should check whether there are any other funding options that would better suit your circumstances. For example, you may be able to get financial support that you do not have to pay back.

Who can apply?

To be eligible to apply for a PCDL, you must:

  • Be 18 or over
  • Not already have a Career Development Loan
  • Have savings of no more than £16,000.00
  • Have indefinite leave to enter or remain or the right to live in the UK and have been residing in the UK for a least three years before the course/programme begins
  • Intend to work in the UK, European Union (EU) or European Economic Area (EEA) once you have finished studying
  • Be able to meet the requirements of the bank lending you the money.
What you can and cannot use a Professional and Career Development Loans for

You can use a PCDL for any vocational full-time, part-time or distance learning course that will help you career. Examples include:

  • Management or technical training
  • Professional qualifications
  • A course at your local college - such as a National or Scottish Vocational Qualifications (N/SVQs)
  • A relevant diploma or degree
  • Postgraduate training - such as a masters
A PCDL can also be used to 'top up' funding received for students receiving a teacher training bursary or NHS bursary to cover costs that the bursary does not cover or for funding received for full time undergraduate (first degree) courses where you have not qualified for all of the various funds/loans available (such as a student loan) from the government.

The PCDL covers courses of up to two years or three years if the course includes one year's practical work experience.

If your course is longer, you can use the loan for part of it. If you use the loan to fund the final two years, you won't have to start repaying it until the course has finished.

A PCDL cannot be used for:

  • Funding for a full time first degree course - where the student is receiving all the available grants or loans from the government
  • Foundation courses which are solely used as a step towards a degree course
  • Careers advice or help with job hunting
  • The costs of starting your own business - including buying a franchise
You should seek advice if you are not sure whether the course you intend to take qualifies or if the institution running the course is registered or willing to be registered under the scheme.

How the Professional and Career Development Loan works

After arranging a loan through the bank, the Skills Funding Agency will pay interest on your loan whilst you are studying and for one month afterwards. Thereafter, you must start paying the interest to the bank.

You then take over repayments at a fixed interest rate over the lifetime of the loan. You agree the length of the loan with the bank (usually between 12 and 60 months).

How much you can borrow

You should ensure that you do not borrow more than you can afford to pay back.

You should find out how much you will be required to pay after you have stopped studying and check to see if you can afford to make the payments from your budget.

You can borrow any amount between £300 and £10,000 to help pay for:

  • Up to 80% of your course fees (100% if you've been out of work for three months at the time of applying)
  • Related expenses, e.g. books, travel costs, equipment and childcare
  • Living expenses, such as food and rent, if you are unemployed or working less than 30 hours a week
You should check with the bank whether it is willing to let you postpone the repayments if at the time they become due you are unemployed and/or receiving state benefits (such as income support).

The bank could take between six weeks and three months to process your application so you should ensure that it is made well in advance of the time that you will require the money for.

Effect on benefits and other financial help

Your benefits could be affected if you get a PCDL. So before applying, check with the Jobcentre Plus office that deals with your benefits.

National Insurance credits

You may be able to claim National Insurance credits during your course - check with your tax office because a gap in your National Insurance contributions record could affect your benefits in future (such as your state pension).

Repaying the Professional and Career Development Loan

You must start repaying your loan once you have stopped studying at the agreed monthly rate.

You must begin repaying the loan even if you do not complete the course (whether or not this is your fault) or if you are unemployed (unless the bank agrees to postpone the repayments).

What if you can't afford the repayments?

You may be able to postpone the repayments.

Whether or not your bank has an obligation to postpone repayments, and the circumstances in which they should do this, will be governed by the terms of your loan agreement with the bank.

If your loan agreement does not provide for the repayments to be postponed then you should contact your bank as soon as you become aware that you may not be able to make the repayments. Your bank may then agree to postpone the repayments if you are, for example, unemployed and/or receiving state benefits (such as job seeker's allowance or income benefit). However, it will be in the bank's discretion whether or not they are prepared to agree to do this.

What to do if your circumstances change

You must tell the bank immediately if anything changes - whether it's your address or an interruption to your course.

If you are refused a Professional and Career Development Loan

Even if you are eligible, the bank could refuse your application.

It will assess:

  • Your ability to repay the loan
  • Your credit history and previous loan history
If you have had financial difficulties in the past, it is best to discuss this when you first apply. You can only apply to one bank at a time – but if one turns you down, you may succeed with another.

What else you need to know

For more information about Professional and Career Development Loans, please visit the Gov.uk website.