House of Commons · Written Ministerial Statement
Student Loan Interest Rates Academic Year 2026/27
13 April 2026 · Department for Education
Proposed by Bridget Phillipson Lab Houghton and Sunderland South
Summarised by AI from the official record, so it can contain mistakes.
At a glance
Key points
- The maximum interest rate on Plan 2 and Plan 3 student loans is capped at 6% for the academic year 2026/27.
- This measure aims to protect students from inflationary pressures.
- The decision follows previous enhancements to the student finance system.
Issue summary
The statement addresses the capping of maximum interest rates on Plan 2 and Plan 3 student loans at 6% for the academic year 2026/27.
Action requested
The government is implementing a short-term protective measure to cap the interest rate at 6%, protecting students from potential inflationary pressures, ahead of the confirmation of the official rates based on RPI in April 2026. This decision follows previous improvements made to the student finance system.
Key facts
- The maximum interest rate for Plan 2 and Plan 3 loans will be capped at 6% from September 1, 2026, to August 31, 2027.
- Interest rates are normally set by reference to the Retail Prices Index (RPI) value for the year to the preceding March.
- The RPI figure for March 2026 will be published on April 22, 2026.
- Under existing arrangements, borrowers on Plan 2 loans may face an interest rate of up to RPI +3%.
- The repayment threshold for Plan 2 loans was increased to £28,470 in April 2025 and further to £29,385 on April 6, 2026.
- Targeted, means-tested maintenance grants will be reintroduced from the 2028/29 academic year for up to £1,000 extra support.