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Written question asked by Neil O'Brien (Conservative) on Wednesday, 13 May 2026, in the House of Commons. It was due for an answer on Monday, 18 May 2026. It was answered by Josh MacAlister (Labour) on Friday, 22 May 2026 on behalf of the Department for Education.

Students: Loans

Question

To ask the Secretary of State for Education, with reference to the Answer of 22 April 2026 to Question 124528 and in the context of the March RPI figure being published, what is the estimated total fiscal cost of the policy of capping the maximum interest rates on Plan 2 and 3 student loans at 6% for the 2026/7 academic year.

Answer

The government is capping the maximum interest rates on Plan 2 and Plan 3 student loans at 6%, instead of the Retail Prices Index (RPI) plus 3%, for the 2026/27 academic year. This short term measure will protect students and graduates from the potential of inflationary pressures due to the situation in the Middle East.

Student loan interest rates are ordinarily set for each academic year by reference to the RPI value for the year to the preceding March. On that basis, interest rates for the 2026/27 academic year would normally be determined using the RPI figure for March 2026, which is due to be published on 22 April 2026.

The impact of the interest rate cap on long term repayments for graduates, and on forecast cost impacts for the public purse, will depend on the March RPI value. Costs will be set out at Budget in the usual way.

Secondary information

Type
Written question
Reference
295
Session
2026-27
Related items
Students: Loans
Wednesday, 22 April 2026
Written questions
House of Commons
Subjects
Loans Students
Contains statistics
Yes
Link
View this Written question on www.parliament.uk