Tweet
Graduates will now start paying interest on their student loans again as new interest rates come into effect.
Each September the Students Loans Company sets interest rates on its loans, which are dependent on when the loan was taken out. Interest on student loans is based on either the Retail Prices Index (RPI) measure of inflation in March, or the highest base rate charged by a group of banks plus 1%, depending on which is lower.
Graduates have enjoyed interest-free student loans for the last year owing to the way the rates are calculated. As RPI was 4.4% in March, the rate for the coming year will be calculated from banks' rates in March, which were lower. Payments to the Student Loans Company include a 1.5% interest rate from 1 September for those who took out a loan after 1998.
The rate could increase during the year if there is a change to the Bank of England Bank rate, which is likely to be mirrored by the banks. About 3.3 million people have a student loan taken out after 1998, while 355,600 have one taken out before 1998.
For more information on interest rates on student loans visit The Student Loans Company website.
More...
Each September the Students Loans Company sets interest rates on its loans, which are dependent on when the loan was taken out. Interest on student loans is based on either the Retail Prices Index (RPI) measure of inflation in March, or the highest base rate charged by a group of banks plus 1%, depending on which is lower.
Graduates have enjoyed interest-free student loans for the last year owing to the way the rates are calculated. As RPI was 4.4% in March, the rate for the coming year will be calculated from banks' rates in March, which were lower. Payments to the Student Loans Company include a 1.5% interest rate from 1 September for those who took out a loan after 1998.
The rate could increase during the year if there is a change to the Bank of England Bank rate, which is likely to be mirrored by the banks. About 3.3 million people have a student loan taken out after 1998, while 355,600 have one taken out before 1998.
For more information on interest rates on student loans visit The Student Loans Company website.
More...
