Graduates from Wales and England are about to be hit by a “brutal” 12% rise interest rates on their student loans. The rise applies to loans taken out since 2012 and will cost graduates an extra £2,200 to £3,000 between September this year and March 2023 depending on how much they earn, the Institute for Fiscal Studies calculated.
Interest rates on student loans taken out since 2012 are based on the retail price index plus 3%, with the 9% rise in RPI in March meaning it will soar from the current interest rate of 1.5% to 12% for the highest earning graduates next September, the IFS said. Interest rates for graduates earning less than £49,000 a year are set to rise from 1.5 per cent to 9 per cent.
An NUS spokesperson estimated recent graduates on more than £49,000 would pay £3,000 in interest on a balance of £50,000 over six months from September 2022 to March 2023. Recent graduates earning less than £49,000 will see interest rates on their student loans increase from the current 1.5% to 9%, incurring about £2,300 interest in the same period.
