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UK students receive unexpected windfall

The Student Loan Company will tomorrow advise up to 400,000 university leavers that instead of paying interest on their student loans they will actually be paid interest by the authorities over the next 12 months. As you may have guessed, the interest rate on these particular loans is linked to the retail price index which recently went into negative territory resulting in a 0.4% interest payment back to students.

However, the situation will only be relevant for those who started university before 1998 and have yet to pay off their student loans. Unfortunately, rather than receiving cash in hand the authorities will ensure that these credits are deducted from outstanding loan figures. As an example, those who took out a student loan of £10,000 before 1998 and have the full amount to repay will see their balanced reduced to £9960 next year.

While this is not exactly the Christmas bonus which many would have hoped for it is certainly something which will assist those potentially struggling to repay their student loans even 11 years after they were taken out. The student loan system is one which has attracted significant controversy due to the fact that many students are leaving university with significant debts before they even start their new jobs.

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