Interest rates on Plan 2 and 3 student loans to be capped at 6%
From September 1, interest on plan 2 and 3 student loans will be capped at six per cent instead of RPI plus three, in a bid to protect borrowers, the Government said
Interest rates on plan 2 and 3 student loans will be capped at 6 per cent from September following mounting criticism over the cost of repayments.
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The Government said the move would help deliver stability and protections for graduates amid the prospect of inflation pressures due to the Middle East war.
Interest on plan 2 loans is currently paid at a rate of between RPI and RPI plus three per cent, depending on earnings.
Current students on plan 2 and plan 3 also face an interest rate of RPI plus three per cent while they are studying.
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From September 1, interest on plan 2 and 3 student loans will be capped at six per cent instead of RPI plus three, in a bid to protect borrowers, the Government said.
Plan 2 student loans are those taken out for undergraduate courses and Postgraduate Certificates of Education (PGCE) since September 1 2012 in Wales and between September 1 2012 and July 31 2023 in England.
Plan 3 student loans cover postgraduate master’s or doctoral courses for borrowers in England and Wales.