MSE News: Student loan interest rates likely to fall from September

"Graduates are likely to see a fall in the amount of interest they pay on their student loans from September..."
Read the full story:

Student loan interest rates likely to fall from September

OfficialStamp.gif

Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.

Comments

  • The eye catching headline is a bit misleading isn't it. Those graduates of the 13 year period 1998-2011, i.e. the majority, will not see a fall in their payments - as they pay the lower of base rate + 1% or inflation. This major group - who are making large repayments at comparatively low graduate salary levels - are at risk if base rates rise (as they are expected to) of increased payments. As a grandparent, I'd rather interest rates stayed low to protect these thirty-somethings!
  • amiehall
    amiehall Posts: 1,363 Forumite
    The eye catching headline is a bit misleading isn't it. Those graduates of the 13 year period 1998-2011, i.e. the majority, will not see a fall in their payments - as they pay the lower of base rate + 1% or inflation. This major group - who are making large repayments at comparatively low graduate salary levels - are at risk if base rates rise (as they are expected to) of increased payments. As a grandparent, I'd rather interest rates stayed low to protect these thirty-somethings!

    While I agree that the headline is misleading as it only applies to loans taken out in 12/13 and 13/14, you're also mistaken.

    No-one will see a fall in their repayments as a result of these changes. This is simply because the interest rate has no bearing on the repayments. Repayments are taken as a flat percentage of salary over a threshold and have nothing to do with the interest rate on the loan. The only way you make increased payments is if you secure an increased salary if that puts your mind at rest at all?
    Sealed Pot Challenge #239
    Virtual Sealed Pot #131
    Save 12k in 2014 #98 £3690/£6000
This discussion has been closed.
Meet your Ambassadors

Categories

  • All Categories
  • 342.2K Banking & Borrowing
  • 249.8K Reduce Debt & Boost Income
  • 449.3K Spending & Discounts
  • 234.4K Work, Benefits & Business
  • 606.7K Mortgages, Homes & Bills
  • 172.7K Life & Family
  • 247.2K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards