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Written question asked by Freddie van Mierlo (Liberal Democrat) on Tuesday, 25 November 2025, in the House of Commons. It was due for an answer on Monday, 1 December 2025 (named day). It was answered by Josh MacAlister (Labour) on Tuesday, 2 December 2025 on behalf of the Department for Education.

Students: Loans

Question

To ask the Secretary of State for Education, what assessment she has made of the fairness of calculating student loan interest at RPI rather than CPI.

Answer

Interest rates are set in legislation in reference to the Retail Price Index (RPI) from the previous March, not the Consumer Price Index (CPI), and are applied annually on 1 September until 31 August. This ensures that over a period of years, interest rates on student loans have been consistently linked to a widely recognised and adopted measure of inflation.

The Office for National Statistics has undertaken a substantial programme of work over the past two years to enhance how inflation is measured. The Office for Budget Responsibility has confirmed that, from 2030 at the earliest, movements in RPI will be aligned with CPI as viewed here: https://obr.uk/box/the-long-run-difference-between-rpi-and-cpi-inflation/.

A full equality impact assessment of how the student loan reforms may affect graduates, including detail on changes to average lifetime repayments under Plan 5, was produced and published in February 2022 and can be found here: https://www.gov.uk/government/publications/higher-education-reform-equality-impact-assessment.

Secondary information

Type
Written question
Reference
94511
Session
2024-26
Subjects
Interest rates Loans Consumer prices index Retail prices index Students
Contains statistics
Yes
Link
View this Written question on www.parliament.uk