The Government is planning an intervention to stop the student loan interest rate hitting an “eyewatering” 12 per cent this September, i can reveal.
The move could save graduates hundreds of pounds in accrued interest on their student debt.
Last month, the Institute for Fiscal Studies warned that the student loan interest rate for some graduates in England and Wales is set to spike because of high inflation.
The maximum interest rate for graduates who took out a loan since 2012 and are earning more than £49,130 will rise from its current level of 4.5 per cent to 12 per cent for six months.
This is because these earners are charged the retail price index (RPI) inflation plus 3 per cent, with RPI based on the year ending in March – a figure of 9 per cent.
