This year's SLC interest rate

gmang

The RPI graph is not looking good.

http://www.statistics.gov.uk/cci/nugget.asp?ID=19

I can't see it being any lower in March, if anything it looks like the SLC rate (for pre-1998 borrowers at least) may be the highest ever this year.

I can imagine that come September, the disparity between pre-98 and post-98 loan rates (currently -0.4% vs 0%) will switch the other way, to the tune of something like 5% vs 1% (due to the government holding interest rates so low).

This is going to really annoy people like me who are still paying off their loans for a course starting pre-1998.

Any other predictions?

Lokolo

The latest rise will be because of VAT going back up. I suspect it will soon drop back (I hope so anyway). 2 months left yet.

atypical

The condition that the interest rate cannot be higher than 1% above the highest base rate of a collection of banks still applies doesn't it? I wonder what this obscure number is. Is this information in the public domain?

When the interest rates decreased in stages last year they appeared to simply follow the BoE base rate. If this number is essentially just the BoE base rate then the maximum interest rate will be 1.5% provided the base rate stays the same.

Lokolo wrote: »

I suspect it will soon drop back

I don't think so. Mervyn King stated in his letter to the Chancellor that inflation "is likely to remain high over the next few months, inflation is more likely than not to fall back to the target [of 2%] in the second half of this year."

Lokolo

atypical wrote: »

I don't think so. Mervyn King stated in his letter to the Chancellor that inflation "is likely to remain high over the next few months, inflation is more likely than not to fall back to the target [of 2%] in the second half of this year."

I think that supports the fact they are not going to increase base rate so loans should be at 1.5%. Woulld be nice.

gmang

Unfortunately the pre-1998 loans were not classified as low-cost, so the base rate clause does not apply. Under the old system, the interest rate is set each September at the previous February's annual RPI change.

There are still a great many people repaying under the old system and I suspect they will be substantially worse off that those with "low-cost" loans.

student_advisor

if only they'd use average RPI not just March's...

Lokolo

student_advisor wrote: »

if only they'd use average RPI not just March's...

If only eh, if only.

melancholly

gmang wrote: »

This is going to really annoy people like me who are still paying off their loans for a course starting pre-1998.

although at least pre-1998 didn't have to pay fees and therefore have substantially bigger loans!! (essentially, whichever part of the system you're in, things are carp in some way!)

i think RPI will be lower in March than it is now.... how much is anyone's guess!

sounds like a sweepstake to me!