Student loan repayments: Interest rates to rise
18th August 2022
Due to Bank of England increasing interest rates, the Department for Education (DfE), in conjunction with the Student Loans Company, have confirmed changes to interest rates & repayment thresholds.
Plan 1 Type Student Loan (those who started study before 1-Sep-12)
- From 1 Sept 22 the interest rate will increase from 1.5% to 2.75%. This will change again if interest rates rise again as the rate is linked to the existing bank rate, plus 1%
- From April 2023, the repayment threshold will rise from £20,195 to £22,015.
Plan 2 & Postgraduate Loans (those who started study after 1-Sep-12)
- Interest rates for Plan 2 are usually between RPI & RPI plus 3%. However, due to accelerating inflation DfE have announced that a cap of 7.3% will be placed on Plan 2 & Postgraduate loans.
- From Sept to 30 Dec 2022 the maximum rate of interest will increase from 4.5% to 6.3%
- From Dec to Aug 23 the maximum rate of interest will be 7.3%
- From April 23 the repayment threshold will be £27,295 for Plan 2 repayments. The threshold for Postgraduate loans is yet to be announced.
Disclaimer - All information in this post was correct at time of writing.
