UK government caps student loan interest rates at 6%

Minister says change for plan 2 and 3 loans in England and Wales will ‘protect borrowers’ from impact of global conflict

• UK politics live – latest updates

The interest rate on plan 2 and plan 3 student loans will be capped at 6%, the Department for Education has announced.

Graduates with plan 2 loans currently pay interest rates based on the retail price index (RPI) measure of inflation, plus up to 3% based on their earnings. Current students on plan 2 and plan 3 loans attract an interest rate of RPI +3% while they are studying.