Student loans could see higher interest rates

Story link: Student loans could see higher interest rates

The government is considering making changes to the student loans system, so that higher interest can be charged.

The changes may be made after a recommendation in Lord Browne’s general review of higher education.

Currently, students pay back their loans when they earn over £15,000 a year, at a low interest rate.

The review is expected to recommend removing the tuition fee cap, currently set at £3,290, and allowing the market to decide the cost of a degree.

Ministers have been considering a system of tiered interest rates – linked to graduates’ earnings.

However, the Liberal Democrat MPs within the Coalition Government are against the rise in fees and a deal has therefore yet to be reached.

From Finance Markets: Ministers consider higher interest rate on student loans