Changes to Interest Rates and Thresholds

The Department for Education (DfE) today (20 August 2018) confirmed the annual updates to the Interest Rates and Thresholds of Income Contingent Student Loans and Mortgage Style Student Loans, as set out in the relevant regulations and terms and conditions of the loans.

20 August 2018

Income Contingent Student Loans

Undergraduate loans 

Income Contingent Student Loans for pre-2012 (Plan 1) loans

From 1 September 2018 until 31 August 2019, the maximum interest rate that can be set for the existing Income Contingent Repayment Loans will be 3.3%. However, the low interest cap will be triggered, and therefore the rate to be charged from 1 September 2018 will be 1.75%.

Please monitor this website regularly as the rates may change during the academic year.

From 6 April 2019, the repayment threshold for pre-2012 (Plan 1) loans will rise to £18,935.

Income Contingent Student Loans for post-2012 (Plan 2) loans

From 1 September 2018 until 31 August 2019, one or more interest rates may apply to you:

Your circumstances

Interest rate

Whilst studying and until the April after leaving the course

RPI + 3% (6.3%)

If you come into repayment from April 2019

Variable interest, dependent upon income 

RPI (3.3%), where income is £25,725 or less, rising on a sliding scale up to RPI + 3% (6.3%), where income is £46,305 or more 

If you lose touch with SLC or do not send them the information they require

RPI + 3% (6.3%), irrespective of income, until SLC have the information they require 

The repayment threshold for post-2012 (plan 2) loans will rise to £25,725 from 6 April 2019 to 5 April 2020.

If you do not know your repayment plan type, you can find out by using our tool.

Postgraduate Loans

From 1 September 2018 until 31 August 2019, the interest rate for borrowers in England taking out a Postgraduate Masters or a Doctoral loan will be 6.3% (RPI + 3%).

The repayment threshold for Postgraduate loans continues to be £21,000.


Mortgage Style Loans

From 1 September 2018 until 31 August 2019, the interest rate for mortgage style loans will be 3.3%

The deferment threshold for mortgage style loans will be £30,737.

Any queries from borrowers who have mortgage style loans should be addressed to their loan administrator.