Help with changing rates?

mooferoo

Saw this on facebook (see it is good!)

Taken from http://www.thisismoney.co.uk/saving-and-banking/student-finance/article.html?in_article_id=421549&in_page_id=52

Graduates hit as loan rate is set to double

Millions of graduates will see the interest rate on their student loans double when the Government hikes the rate from 2.4% to 4.8% from September.

The rate is linked to the retail prices index for the year to March which this year was 4.8pc - in March 2006 it was 2.4pc. The rate charged is fixed once a year and changes from September. Student loans start accumulating interest as soon as they are paid out and continue to do so until they are repaid.

Graduates start repaying their student loans from the April after they graduate, but only once they are earning at least £15,000 a year. Their repayments are calculated as 9pc of their earnings.

As the typical graduate leaves university with an outstanding student loan of £12,000, at the current rate of 2.4% interest £288 would be added if no repayments were made. From September, with the rate at 4.8%, this would result in £576 being added in interest.

Can anyone offer any advice or further info?

The_One_Who

The interest on the loans matches the rate of inflation, does it not?

mooferoo

Yes, but i think that is what might be changing...hmm not too sure!

CLAPTON

mooferoo wrote: »

Saw this on facebook (see it is good!)

Taken from http://www.thisismoney.co.uk/saving-and-banking/student-finance/article.html?in_article_id=421549&in_page_id=52

Graduates hit as loan rate is set to double

Millions of graduates will see the interest rate on their student loans double when the Government hikes the rate from 2.4% to 4.8% from September.

The rate is linked to the retail prices index for the year to March which this year was 4.8pc - in March 2006 it was 2.4pc. The rate charged is fixed once a year and changes from September. Student loans start accumulating interest as soon as they are paid out and continue to do so until they are repaid.

Graduates start repaying their student loans from the April after they graduate, but only once they are earning at least £15,000 a year. Their repayments are calculated as 9pc of their earnings.

As the typical graduate leaves university with an outstanding student loan of £12,000, at the current rate of 2.4% interest £288 would be added if no repayments were made. From September, with the rate at 4.8%, this would result in £576 being added in interest.

Can anyone offer any advice or further info?

This seems very clear ... do you have a specific query?