Student loan interest could rise despite cap on rates

Temporary limit in England and Wales won’t stop many facing higher charges from autumn due to jump in inflation from Iran war Government caps some student loan interest at 6% Some students and graduates are likely to pay slightly less interest on their student loans than expected as a result of action taken by the government this week. But while many higher earners will benefit from the news that interest will be capped at 6% for the 2026-27 academic year, many others are likely to have more interest added to their student loan from this autumn than is being applied at the moment. For that, they can blame Donald Trump. The row over millions of graduates trapped by ballooning debts has focused on plan 2 loans. These were taken out by students from England who started university between September 2012 and July 2023, and students from Wales who have started since September 2012. Many have money taken from their pay each month to repay their loan, but what they pay off is dwarfed by the interest that is being added every month, so the sums they owe are getting bigger. It has announced a cap on the interest rate on “plan 2” student loans from 1 September until 31 August 2027. This 6% ca