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Student loan interest rates capped at 6% for Plan 2 and postgraduate loans
The interest rate on Plan 2 student loans and postgraduate (Plan 3) loans will be capped at 6% from 1 September 2026, the Government has confirmed today (Tuesday 7 April). It comes amid concerns of a potential rise in inflation – which student loan interest rates are based on – due to the conflict in the Middle East.
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Student loan interest rates capped at 6% for Plan 2 and postgraduate loans
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Comments
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God, 6% is a lot, I didn't even know what interest meant when I was that age.
I'm FTB, not an expert, all my comments are from personal experience and not a professional advice.Mortgage debt start date 11/2024 = 175k (5.19%)... Q1/2026 = PAID (3.94%)0 -
6% is about 5% too much.
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The only people this benefits are those who are able to clear their debt. Those that don't get no benefit from this, it would have been fairer to raise the starting amount as that would benefit everyone.
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Expecting at least 3.5% for plan 1, that would be a bonus if no higher. Mine is going down about £18-20 a month currently, chunk more with bonus but the new thresholds even with a pay rise mean it's still unlikely mine will be paid off before I get to 65
Sam Vimes' Boots Theory of Socioeconomic Unfairness:
People are rich because they spend less money. A poor man buys $10 boots that last a season or two before he's walking in wet shoes and has to buy another pair. A rich man buys $50 boots that are made better and give him 10 years of dry feet. The poor man has spent $100 over those 10 years and still has wet feet.
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That's not strictly true. Those that will clear the debt if the interest rate is lower, but won't with a higher interest rate will also benefit. If the interest is increasing the debt by less than it otherwise would, there will be some that will clear their loan but otherwise won't.
I agree with you that the threshold is still too low.
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