Student loan interest rates go up
As from today, students and graduates will no longer benefit from interest-free student loans. This will add to the squeeze on graduates’ finances, as starting salaries for graduate jobs have tended to stagnate since the economic downturn.
The Student Loans Company has announced that graduates who took out a loan after 1998 will be charged interest of 1.5% during the year to August 31 2011. This interest rate may change, as it is linked to the rates charged by high street banks, but can go no higher than 4.4% during the course of the year.
The interest rate on loans taken out before 1998 will be 4.4% from 1 September 2010 to 31 August 2011, as interest for these is linked solely to the Retail Price Index (RPI).
During the past year, the interest rate on post-1998 loans was 0%, while on pre-1998 loans it was -0.4%. However, despite the increase, student loans remain one of the cheapest ways to borrow money in the UK. Graduates are generally advised to pay off more expense debts, such as outstanding credit card balances that attract a higher rate of interest, first.
The most recent survey from the Association of Graduate Recruiters (AGR) found that the average predicted starting salary on offer from its members in 2010 was £25,000, the same as in 2009. This would make 2010 the first year in the history of the AGR survey that salary levels have remained stagnant for two consecutive years. The pay on offer from AGR members is likely to be higher than the typical graduate starting salary, as the AGR membership includes many large, market-leading organisations.
- Balancing study and part-time work
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- Search for graduate jobs, schemes and employers on targetjobs.co.uk now
Posted by Alison_TARGETjobs on 1 September 2010
Comments on ‘Student loan interest rates go up’
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AlmaE, 15 February 2011, 6.56 am“Students in the United States owe lots of money. There is over $885 billion owed in private student loans. While students are on the hook for the majority of that debt, some households are facing heart-wrenching decisions. Though co-signing legally makes a second individual accountable for the debt, some are being asked to pay even when they have not co-signed.”