Practitioners: Ask SFE about interest on student loans 2017/18

Yes, interest is charged from the day we make the first payment until the loan is repaid in full or cancelled The interest rate is set by the government and is based on the UK Retail Price Index, or RPI, which is a measure of UK inflation

It measures changes to the cost of living in the UK The interest rate is updated once a year in September, using the RPI from March of that year, meaning it may increase or decrease The actual rate applied to the student’s loan will then vary depending on their circumstances While they’re studying, interest is applied at RPI plus 3%, but from the April after they finish their course, the interest rate will vary depending on their income If their income is £21,000 or less, the interest rate will be RPI only

If their income is between £21,000 and £41,000, the rate will vary on a sliding scale up to a maximum of RPI plus 3% If their income is over £41,000, the interest rate will be RPI plus 3% To find out the current RPI rate and for more information on interest, read the ‘what will I repay’ section of the repayment quick start guide Or for a range of helpful tools and guidance visit our student finance zone on The Student Room