Stories

Tue, 07 Apr 2026

Tue, 07 Apr 2026 Plan 2 student loan interest rates capped at 6% in England

The cap on Plan 2 and postgraduate loan interest rates comes amid a risk of rising inflation.

* Interest on some student loans in England will be capped at 6% for the 2026-27 academic year.
* The cap applies to Plan 2 and postgraduate loans, which were issued in England between September 2012 and July 2023.
* The interest rate is currently set at RPI (Retail Prices Index) plus up to 3%, depending on earnings. This means that the highest-earning graduates have been seeing their debt rise by 6.2% this year.
* Analysts believe the rate of inflation is rising due to the Iran war, and the government has introduced a cap to protect borrowers from high interest rates.
* The cap will provide immediate protection for borrowers, but campaigners say further change is needed to address the unfairness of the student loans system.
* There have been calls to lower the interest rate on Plan 2 student loans as part of a wider overhaul of the system.