My noble Friend, the Under-Secretary of State for the School System and Student Finance (Baroness Barran), has made the following statement.
I am announcing today an additional temporary reduction to the post-2012 income contingent repayment undergraduate and postgraduate loan interest rates effective as of 1 December 2022.
The Government announced on 13 June 2022 that the student loan interest rate would be set at a maximum of 7.3% between 1 September 2022 and 31 August 2023, in line with the forecast prevailing market rates. The Government confirmed that should the actual prevailing market rate turn out to be lower than forecast, a further cap would be implemented to reduce student loan interest rates accordingly.
From 1 September 2022 to 30 November 2022, reflecting a lower than forecast prevailing market rate, the maximum interest rate is 6.3% for all post-2012 (plan 2) and postgraduate (plan 3) loans.
I am now announcing a further cap: from 1 December 2022 to 28 February 2023 the maximum interest rate will be 6.5% for all post-2012 (plan 2) and postgraduate (plan 3) loans, reflecting the most recent prevailing market rate. This is a reduction compared to the 7.3% maximum rate announced in June.
From 1 March 2023 to 31 August 2023, the maximum interest rate will be 7.3%. Subject to the prevailing market rate, the Government may announce further caps to apply during this period.