The Department of Education (DfE) confirmed today (August 12, 2021) the annual updates of interest rates and thresholds for income-contingent student loans and mortgage-style student loans, as outlined in the regulations and general loan conditions.
Student loans by income
Undergraduate loans
Student Loans by Income for Pre-2012 Loans (Plan 1)
From September 1, 2021 to August 31, 2022, the maximum The interest rate that can be set for existing income contingent loans will be 1.5%. However, the low interest ceiling will be triggered, and therefore the rate to be charged from September 1, 2021 will be 1.1%.
Please monitor this website regularly as rates may change during the academic year.
From April 6, 2022, the repayment threshold for pre-2012 loans (Plan 1) will increase to £ 20,195.
Student Loans by Income for Post-2012 Loans (Plan 2)
From September 1, 2021 to August 31, 2022, one or more interest rates may apply to you, subject to caps in place to reflect the prevailing market rate:
| Your situation | Interest rate |
|---|---|
| During studies and until April after leaving the course | RPI + 3% (4.5%) |
| While you are in reimbursement (from April 6 after leaving the course) | Variable interest from RPI (1.5%) to RPI + 3% (4.5%), depending on income. Lower and upper interest income thresholds will be confirmed in due course |
| If you lose contact with SLC or don’t send them the information they need | RPI + 3% (4.5%), regardless of income, until SLC has the information it needs |
Market rate ceiling in effect:
From September 1, 2021 to September 30, 2021:
The temporary cap on the prevailing market rate is in place, reducing the highest interest rate by 0.3 percentage point to 4.2%.
The rate during studies will be 4.2%.
The variable rate will be 1.5% to 4.2%.
From October 1, 2021 to August 31, 2022:
The rate under study will return to RPI + 3% and will drop from 4.2% to 4.5%.
The variable rate will revert to the RPI at RPI + 3% which will be 1.5% – 4.5%.
The income and variable interest thresholds for post-2012 loans (plan 2) applicable from April 2022 will be announced in due course.
Postgraduate loans
From September 1, 2021 to August 31, 2022, the interest rate for borrowers in England taking out postgraduate or doctoral loans will be 4.5% (RPI + 3%), subject to caps in place to reflect the prevailing market rate.
Market rate ceiling in effect:
From September 1, 2021 to September 30, 2021:
The temporary cap on the prevailing market rate is in place, reducing the interest rate by 0.3 percentage point to 4.2%.
From October 1, 2021 to August 31, 2022:
The interest rate returns to RPI + 3%, which will be 4.5%.
Income thresholds for postgraduate or doctoral loans to be applied from April 2022 will be announced in due course.
Mortgage-style loans
From September 1, 2021 to August 31, 2022, the interest rate for mortgage-style loans will be 1.5%.
The deferral threshold for mortgage style loans will be £ 36,284.
All questions of borrowers who have mortgages should be directed to their loan administrator.