The administration had earlier stated that student loan interest rates would be decreased from 12 percent to 7.3 percent. Now, they are anticipated to be considerably less.
The interest rates on student loans in England and Wales will be reduced for a second time to safeguard borrowers from rising inflation amid the cost of living crisis.
The Department for Education (DfE) has stated that rates will drop to 6.3% beginning in September.
The government announced in June that student loan interest rates will be decreased from 12 percent to 7.3 percent.
Andrea Jenkyns, minister for skills, further and higher education, stated that the new cap is being implemented “to comply with the most latest market statistics.”
DfE said that the new rates will cut student loan interest rates by the biggest amount ever.
The Student Loans Company stated that borrowers are not obliged to take any action in light of the move, as it would be implemented automatically.
The revised interest rates will affect undergraduate (Plan 2) and graduate (Plan 3) loan recipients.
According to the DfE, someone with a £45,000 student loan outstanding would save approximately £210 per month in interest payments as a result of the cut in interest rates.
This reduction is applied to the loan’s total value, as the monthly payments remain the same.
Ms. Jenkyns continued, “We recognize that many people are concerned about the impact of rising prices, and we want to reassure them that we will provide assistance where we can.”
We have lowered future interest rates so that no new graduate will ever again have to pay back more than they borrowed in real terms. This applies to students beginning higher education in September 2023, as well as those who are considering this next step.
Borrowers have been advised to utilize the Student Loans Company’s online repayment tool to periodically check their balance and repayment information, as well as to maintain accurate contact information.
