Student loan interest rates to rise sharply due to value of the pound dropping post-Brexit

i News reports that millions of students and graduates will be hit by a severe rise in interest rates on their tuition fees and maintenance loans due to the Brexit vote.

A rise in inflation, following the decline in the value of the pound after the EU referendum decision, means students will be hit by interest rates of a staggering 6.1 per cent from September.

Student groups and campaigners have warned that the rate rise will force students to drop out of their courses or put off going to university altogether amid fears of being crippled by debt. 

Jake Butler, from Save the Student, says “Young people will not want to saddle themselves with so much debt. Even though the loan is scrapped after 30 years, people do not want that level of debt hanging over them.”

“It will likely mean people will be put off from applying to university. We have already seen people on social media asking what is the point in carrying on with their degree if it means they will face such levels of debt.”

Universities have been allowed to increase tuition fees in line with inflation, meaning annual fees will increase to £9,250 a year from the autumn. It means students from low income backgrounds would be looking at graduating with more than £50,000 in debt due to tuition fee and maintenance loans.

 A Department for Education spokeswoman said: “Our student funding system is sustainable and fair, with affordable loan rates based on income. This means no individual will see their repaymen‎ts rise as a result of interest rates increasing.

Students in Scotland and Northern Ireland will not be affected by the change, as they face similar interest rates to students in England and Wales who started university between 1998 and 2011. These students will continue to be charged interest rates of 1.25 per cent from September.

Read more Student loan interest rates to rise sharply due to value of the pound dropping post-Brexit

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