Student loan interest rates slashed for second time amid cost-of-living crisis

15 Aug 2022

Student loan interest rates in England and Wales are set to be cut for a second time to protect borrowers from rising inflation amid the cost-of-living crisis.

Rates will be reduced to 6.3% from September, the Department for Education (DfE) recently announced.

The change comes after the government revealed in June that the student loan interest rates were to be cut from 12% to 7.3%.

Minister for Skills, Further and Higher Education, Andrea Jenkyns, said: 'Back in June, we used predicted market rates to bring forward the announcement of a cap on student loan interest rates down from an expected 12% and we are now reducing the interest rate on student loans further to 6.3% . . . to align with the most recent data on market rates.

'For those starting higher education in September 2023 and any students considering that next step at the moment, we have cut future interest rates so that no new graduate will ever again have to pay back more than they have borrowed in real terms.'