- The government has announced that student loan interest rates for Plan 2 and Plan 3 borrowers will be capped at 6% from September.
- This move aims to provide stability and protection for graduates facing increased financial pressures, partly attributed to the ongoing conflict in the Middle East.
- Previously, interest rates for these loans could be as high as the Retail Price Index (RPI) plus 3%, which currently stands at 6.2%.
- Plan 2 loans apply to undergraduate and Postgraduate Certificates of Education courses in Wales (since September 2012) and England (between September 2012 and July 2023), while Plan 3 covers postgraduate master's or doctoral courses in England and Wales.
- Skills minister Jacqui Smith stated the cap offers immediate protection for borrowers within the "unfair system" and highlighted ongoing efforts to reform the broader student finance system.
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