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  "path": "/2026/04/07/student-loans-capped-interest-rate-changes-coming-borrowers-27884885/",
  "publishedAt": "2026-04-07T13:36:46.000Z",
  "site": "https://metro.co.uk",
  "tags": [
    "News",
    "Politics",
    "British Government",
    "Department for Education",
    "student",
    "Universities",
    "Wales",
    "government",
    "Iran",
    "Iran war",
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    "check our news page",
    "Add Metro as a Preferred Source on Google\nAdd as preferred source"
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  "textContent": "The government said around 125,000 people would be affected by the measure (Picture: Getty Images)\n\nAfter weeks of pressure over exorbitant student loans in England and Wales, the government has announced rates will be capped.\n\nThe move is largely pre-emptive, the Department for Education said, to ensure inflation-linked rates don’t rise to unsustainable levels due to the war in Iran.\n\nUnder the new measure, interest on Plan 2 and Plan 3 student loans will be limited to 6%.\n\nCurrently, graduates on Plans 2 and 3 can pay rates of up to 3% above the Retail Price Index (RPI) measure of inflation.\n\nThere are concerns RPI could skyrocket along with other measures of inflation as the Iran war puts huge pressure on the global economy.\n\n## What is changing for people on Student Loans Plan 2 and 3?\n\n##  Want to understand more about how politics affects your life?\n\nMetro's senior politics reporter Craig Munro breaks down all the chaos into easy to follow insight, in **Metro** 's politics newsletter Alright, Gov? Sent every Wednesday. Sign up here.\n\nThis change will mean graduates on Plan 2 and Plan 3 do not pay interest rates of more than 6% in the coming academic year.\n\nThat applies to everyone currently on those plans, no matter which year they graduated.\n\nIt is expected to impact around 125,000 people.\n\nMeanwhile, the repayment threshold for Plan 2 loans also increased on Monday from £28,470 to £29,385.\n\n## When do these changes start?\n\nThe measure will kick in when the new academic year begins on September 1, and last until August 31 next year.\n\nWhile this cap will not currently apply beyond the 2026/27 academic year, the Department for Education said rates are being kept under review and any new measures will be set out in due course.\n\nThe changes mean graduates on Plan 2 and Plan 3 do not pay interest rates of more than 6% in the coming academic year (Credits: Getty Images)\n\n## How will the interest rate cap affect me?\n\nIt depends how much you earn.\n\nIf you’re on Plan 2, your interest rate is variable depending on how much you earn – you can find out how much on the Gov.uk site here.\n\nThis new measure won’t affect you unless that variable rate is higher than 6% – if it is, you won’t pay more than 6% between September 1 this year and August 31 the year after.\n\n## What are people saying about this?\n\nJacqui Smith, the government minister for skills, said: ‘We know that the conflict in the Middle East is causing anxiety at home, and while the risk of global shocks is beyond our control, protecting people here is not.\n\n‘Capping the maximum interest rate on Plan 2 and Plan 3 student loans will provide immediate protection for borrowers, supporting those who are most exposed within this already unfair system.\n\nThis new measure won’t affect you unless that variable rate is higher than 6% (Credits: Getty Images)\n\n‘We’re acting now to defend against the consequences of far-away conflicts in an uncertain world.’\n\nBut Laura Trott, the Conservative shadow education secretary, said Labour’s move was mere ‘tinkering around the edges’.\n\nShe said: ‘These proposals do not go far enough and they confirm Labour have no serious plan to stop graduates being ripped off.\n\n‘Our New Deal for Young People will scrap real interest on student loans.\n\n‘We will double apprenticeships and put an end to dead-end degrees, so young people have a real choice about their future when they leave school.’\n\n******Get in touch with our news team by emailing us atwebnews@metro.co.uk.******\n\n**For more stories like this,** check our news page.\n\nComment now Comments \nAdd Metro as a Preferred Source on Google\nAdd as preferred source\n",
  "title": "Have student loans been capped? The interest rate changes coming to borrowers"
}