Higher student loan rates come into effect

Relatively few young people in the UK achieve the dream of higher education without student loans.

The first days of September mean that millions of UK graduates will have to start paying interest on their student loans because new interest rates become valid.

Those borrowers, who were given a loan after 1998, will have to pay a 1.5 per cent interest rate to the Student Loans Company starting from the first day of autumn.

The interest rates remain 4.4 per cent for those who took out the loan prior to this time.

Graduates didn’t have to pay the interest on their loans during the last year due to the interest rate calculation method.

The new rates replace the rates of 0 per cent on the loans taken out after1998 and -0.4 per cent on the loans taken out before1998 which have been effective during the last year.

In addition, it is expected that the interest rate will increase during the course of the current year provided the Bank of England’s base interest rate increases.

According to the statistical data, nearly 3.3 million British citizens have a student loan obtained after 1998, while only 355,600 have to repay student loans taken out before 1998.
 


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