I made a statement on 13 June 2022 to confirm the intention to cap the interest rate charged to Welsh students on certain loans from September 2022 at 7.3% for a period of 12 months. Following further review, I can state that the rate will be capped at a lower rate of 6.3% for three months from 1 September 2022. This cap has also been announced by the UK Government for English students. The Welsh Government will continue to protect students from high interest rates on their loans, rates which are a result of high levels of inflation.
The rate of inflation which determines the interest charged on certain loans reached 9% in the year to March 2022. Interest rates would rise to up to 12% from September 2022 for a period of time before rates are capped. The Welsh Government must ensure that rates do not exceed the prevailing market rate and has taken action three times in the last year to cap the rate on loans and protect students.
