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Sharp increase in student loan interest rates
12 May 2017
Higher inflation means millions of students and former graduates face a big rise in the interest rates on their tuition and maintenance loans.
Rates are linked to inflation and will rise by a third from 4.6% to up to 6.1% this autumn. The Department of Education is promising to confirm the rates in September.
Students who took out loans from 2012 pay interest based on the RPI measure of inflation in March. This March it showed an increase to 3.1%, compared to just 1.6% in 2016 and 0.9% in 2015. Students still at university are charged interest at RPI plus 3% - hence the new estimate of 6.1%.
* It was recently estimated that in England student debt stood at £76bn. In 2011 this figure was just £34bn
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