Student loan interest rate to be capped at 7.3% in autumn, says DfE

Graduates pay 9% of their income above a repayment threshold of £27,295 a year. Photograph: Oli Scarff/AFP/Getty Images

Ministers have intervened to reduce a sharp rise in interest rates charged on student loans, after the recent increase in inflation which meant rates would treble for many graduates by the autumn.

The Department for Education said the maximum rate from September is to be fixed at 7.3% rather than the 12% it would have reached by September, based on earlier inflation figures plus 3%.