Interest rate on student loans to go up to 6.1%

16 Aug 17

The top rate of interest on student loans will go up to 6.1% this year as planned, the government has confirmed.

The Department for Education yesterday made clear that the government would not rethink the policy of increasing the top rate of interest from 4.6% to 6.1%. 

Opposition parties had called for a reversal of the plan after it emerged yearly tuition fees would go above £9,000 for the first time this September.

Graduates earning more than £40,000 pay the top rate. 

A Department for Education spokesperson said: “As has always been the case, borrowers will only ever pay back what they can afford so no-one will see monthly repayments rise and only the highest earners will pay the top rate of interest.”

The interest rate is based on the inflation rate, using the retail prices index in March, plus an additional 3%.

Labour had campaigned to scrap tuition fees during the election and the party’s shadow secretary of state for education, Angela Rayner, said: "Graduate debt is already skyrocketing, and too many students fear a lifetime of debt.”

The announcement follows a report from the Sutton Trust, which showed a drop in the number of 11-16 year olds considering going into higher education, citing concerns over tuition fees and graduate debt as a driving force behind the reluctance for further study.

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