The UK government has announced a temporary cap on student loan interest rates at 6% from September for plan 2 and plan 3 loans in England and Wales, aiming to shield borrowers from inflation spikes linked to global conflicts.
Skills minister Jacqui Smith said the measure would protect those most exposed within an 'already unfair system' amid rising costs from the war in the Middle East. The cap applies to graduates and current students, with rates previously set at RPI plus up to 3%.
Campaign groups welcomed the move but called for broader reforms. National Union of Students president Amira Campbell described it as 'a huge win', while stressing the need to address frozen repayment thresholds that could cost graduates up to £300 more per year.
Critics argue the cap does not tackle systemic issues. Shadow education secretary Laura Trott accused Labour of 'tinkering around the edges', and Tom Allingham of Save the Student urged 'far more substantial changes' for a fair system.
The Welsh government has agreed in principle but requires Senedd approval after next month's election. The cap is a one-year temporary measure, with ministers pledging further review of student loan fairness.
