{"id":124180,"date":"2026-08-11T10:30:00","date_gmt":"2026-08-11T09:30:00","guid":{"rendered":"https:\/\/en.econostrum.info\/uk\/?p=124180"},"modified":"2026-08-11T10:24:05","modified_gmt":"2026-08-11T09:24:05","slug":"student-loan-shake-up-confirmed-borrowers","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/uk\/student-loan-shake-up-confirmed-borrowers\/","title":{"rendered":"Student Loan Shake-up Confirmed as Millions of Borrowers Face New Rates from September"},"content":{"rendered":"\n

The rates will remain in force until 31 August 2027 and are based on an RPI figure<\/strong> of 4.1%. According to the Student Loans Company, that rate will determine the interest charged across a number of loan categories, although the way it is applied differs depending on the repayment plan held by each borrower.<\/p>\n\n\n\n

Plan 2 and Plan 3 Interest Rates Will Be Capped at 6%<\/h2>\n\n\n\n

Borrowers with Plan 2 student loans normally face interest rates ranging from RPI to RPI plus three percentage points, depending on their circumstances. With RPI set at 4.1% for the relevant period, this would ordinarily create a range between 4.1% and 7.1%.<\/p>\n\n\n\n

The government has instead placed a ceiling <\/strong>on the highest rate that can be charged. According to the Student Loans Company<\/a>, the maximum interest rate applied to Plan 2 loans will be capped at 6% from 1 September 2026 until 31 August 2027.<\/p>\n\n\n\n

The same maximum rate will apply to postgraduate borrowers with Plan 3 loans. Their standard interest formula is RPI plus three percentage points, which gives a rate of 7.1% using the RPI figure confirmed for the coming year. The Student Loans Company said the maximum Plan 3 interest rate would also be limited to 6% throughout the same period. The cap had previously been announced on 7 April 2026.<\/p>\n\n\n\n

Other repayment plans will operate differently. Plan 5 undergraduate loans will carry interest equal to RPI, meaning a rate of 4.1% between September 2026 and August 2027. Plan 1 borrowers <\/a>will also be charged 4.1% over that period. GB News reported that the Bank of England<\/strong> base rate stands at 3.75%, while the Student Loans Company confirmed that the maximum Plan 1 rate for the period will be 4.1%.<\/p>\n\n\n\n

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A few people mentioned overpaying my student loan, and here is why it is a terrible idea.

Perhaps one of the worst financial decisions ever.

Monthly repayments:
\u00a3128

Annual payment: \u00a31,536

Interest added on each year (roughly): \u00a35k. \ud83e\udd2a

That means if I voluntarily repaid\u2026 pic.twitter.com\/x64GoKYgnf<\/a><\/p>— George – \u00a3127k \ud83c\uddec\ud83c\udde7 (@GMFinX) August 10, 2026<\/a><\/blockquote>