Student Loan Interest Falls
I only found this out from my dad this morning, but you can read it here:
The amount to be paid back will depend on the amount borrowed plus the interest charged. Interest is linked to the rate of inflation and is adjusted each year in line with the Retail Prices Index (RPI). From 1 September 2008 to 31 August 2009 this will be 3.8%.
Change to Income Contingent Repayment loan interest rate
The interest rate payable on income based student loans has been reduced following the latest change to the Bank of England rate to 1.5% on Thursday 8 January. The new rate for income based student loans is 2.5% from 9 January until further notice. Interest is applied to loans from the date they are paid to you until they are repaid in full.
Why has it changed?
Student loans are not like commercial loans. They are subsidised by Government and attract a low cost interest rate. This interest rate is based on the annual March Retail Price Index (RPI) or the highest base rate of a number of major banks plus 1%; whichever is lower.
To date, the RPI has always been the lower of the two. The reduced bank base rate plus 1% is now lower than the March 2008 RPI so we have presently adjusted the student loan rate to 3%.