Undergraduate loans
Income Contingent Student Loans for pre-2012 (Plan 1) undergraduate loans
The interest rate on pre-2012 income-contingent repayment student loans is RPI or the Bank Base Rate + 1%, (“the low interest cap”) whichever is lower. The low interest rate cap is in effect, therefore the interest rate for pre-2012 (Plan 1) loans is currently 6%. This rate will continue to be charged from 1 September 2023 but may be adjusted throughout the year in line with Bank Base Rate changes.
If the low interest rate cap no longer applies during the year, the interest rate on Plan 1 Income Contingent Repayment Loans during the period 1 September 2023 until 31 August 2024 will be 13.5%, the applicable rate of RPI for the period.
Please monitor this website regularly as the rates may change during the academic year.
From 6 April 2024, the repayment threshold for pre-2012 (Plan 1) loans will rise to £24,990.
Income Contingent Student Loans for Plan 2 undergraduate loans
The applicable RPI rate is 13.5% for the period 1 September 2023 to 31 August 2024. Interest rates for Plan 2 income contingent student loans vary between RPI (13.5%) and RPI +3% depending on your circumstances. These rates are subject to any caps to reflect the Prevailing Market Rate.
Prevailing Market Rate cap
From 1 September 2023 to 30 November 2023:
The maximum interest rate will be 7.3% for all Plan 2 loans, in line with the latest published Prevailing Market Rate.
From 1 December 2023, the Plan 2 interest rate is scheduled to revert to RPI to RPI+3% (depending on borrower circumstances). Further caps will be implemented, if required, to reduce student loan interest rates to align with the prevailing market and will be confirmed closer to the time.
The income threshold for repayment of Plan 2 loans from April 2024 remains at £27,295.
Income Contingent Student Loans for Plan 5 undergraduate loans
The applicable RPI rate is13.5% for the period 1 September 2023 to 31 August 2024. The interest rate for Plan 5 is RPI (13.5%) + 0%. This rate is subject to any caps to reflect the Prevailing Market Rate.
Prevailing Market Rate cap:
From 1 September 2023 to 30 November 2023:
The maximum interest rate will be 7.3% for Plan 5 loans, in line with the latest published Prevailing Market Rate.
From 1 December 2023, the Plan 5 interest rate is scheduled to reduce to RPI. Further caps will be implemented, if required, to reduce student loan interest rates to align with the prevailing market and will be confirmed closer to the time.
The income threshold for repayment of Plan 5 loans due to come into repayment from April 2026 is £25,000.
Postgraduate Loans – Plan 3
The Interest rate for Postgraduate Master’s or Doctoral loans is RPI plus 3%. The applicable RPI rate is 13.5% for the period 1 September 2023 to 31 August 2024. This rate is subject to any caps to reflect the Prevailing Market Rate.
Prevailing Market Rate cap:
From 1 September 2023 to 30 November 2023:
The maximum interest rate will be 7.3% for Postgraduate loans, in line with the latest published Prevailing Market Rate.
From 1 December 2023, the Plan 3 interest rate is scheduled to revert to RPI+3%. Further caps will be implemented, if required, to reduce student loan interest rates to align with the prevailing market and will be confirmed closer to the time.
The income thresholds for repayment of Postgraduate Masters and Doctoral Loans to apply from April 2023 will be announced in due course.
Mortgage Style Loans
From 1 September 2023 until 31 August 2024, the interest rate for mortgage style loans will be RPI, that is,13.5%.
The deferment threshold for mortgage style loans will be £38,255.
Any queries from borrowers who have mortgage style loans should be addressed to their loan administrator.
