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The Independent UK
The Independent UK
National
Nina Lloyd and David Hughes

UK government announces cap on student loan interest rates

Interest Rates
  • The government has announced that student loan interest rates for Plan 2 and Plan 3 borrowers will be capped at 6% from September.
  • This move aims to provide stability and protection for graduates facing increased financial pressures, partly attributed to the ongoing conflict in the Middle East.
  • Previously, interest rates for these loans could be as high as the Retail Price Index (RPI) plus 3%, which currently stands at 6.2%.
  • Plan 2 loans apply to undergraduate and Postgraduate Certificates of Education courses in Wales (since September 2012) and England (between September 2012 and July 2023), while Plan 3 covers postgraduate master's or doctoral courses in England and Wales.
  • Skills minister Jacqui Smith stated the cap offers immediate protection for borrowers within the "unfair system" and highlighted ongoing efforts to reform the broader student finance system.

IN FULL

Student loan interest rates to be capped after backlash over repayment costs

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