This weekend the papers mooted that Theresa May’s government is looking to cut the English and Welsh student loan interest rate – now at a 6.1% headline rate for those who began uni in or after 2012 – in order to appeal to the youth vote.
I find this frustrating. Not because I object; I’ve always believed on principle student loan interest shouldn’t be higher than inflation – charging students for their education is one thing, charging them for the financing of their education is a step too far.
Yet if the Exchequer has limited resources to finally shell out something to relieve student loan pressures, cutting the interest rate is far from a priority – in fact, it’s poorly targeted. Student loan interest rates change every September, based on the RPI rate of inflation the prior March. For this 2017/18 academic year the rates are as follows:
– While studying: Interest is charged at RPI + 3% (= 6.1%
Get Britain's best politics newsletters
Register to get The Spectator's insight and opinion straight to your inbox. You can then read two free articles each week.
Already a subscriber? Log in
Comments
Join the debate for just $5 for 3 months
Be part of the conversation with other Spectator readers by getting your first three months for $5.
UNLOCK ACCESS Just $5 for 3 monthsAlready a subscriber? Log in