The government has announced a cap on student loan interest rates, protecting graduates from rising interest rates in September.
- A rise in interest rates due to global economic pressures meant student loan borrowers faced a 12 per cent interest rate in September – our priority is to help people keep more of what they earn.
- That is why the government has intervened and capped interest rates to a maximum of 7.3 per cent in the largest scale reduction of student loan interest rates on record – so a graduate with a student loan balance of £45,000 would reduce their accumulating interest by around £180 per month compared to 12 per cent interest rates. Graduates only have to repay these loans when they are earning more than £27,000 a year, repayments are based on their income, they do not need any assets, and after a period it gets written off.
- Conservatives have always been clear that where we can help with rising prices we will, and we have cut future interest rates so that no new graduate will ever again have to pay back more than they have borrowed in real terms.