Student Loans Company implements interest on student loans

The Student Loan Company has today announced a restructuring of student loans taken out before 1998 and those taken out in 1998 and beyond. Those who took out loans before 1998 will now pay 4.4% per annum on their outstanding debt and those taking out loans in 1998 and after will pay 1.5% on their original student loan.

It is believed that there are still 355,000 students who have loans outstanding from pre-1998 and around 3.3 million have taken loans out from 1998 and beyond. This is yet another body blow to students in the UK who are still reeling from significant budget cuts which have reduced the number of places now available across the board. The 1.5% interest rate and the 4.4% interest rate were arrived at using relevant RPI figures and will fluctuate in the future.

The cost of further education in the UK continues to creep higher and higher with rumours that the UK government is also looking to increase tuition fees. As further pressure from the economic downturn leads to more and more budget cuts it seems highly likely we will see further increases in the cost of education for students. Whether this is a short-term solution with potentially damaging long-term implications is open to debate.