By Tom Larsen-Wright
The interest rate on student loans will rise by a third this September, for all students who started university after 1 September 2012.
The rate was previously 4.6%, but rose to 6.1% due to inflation.
Graduates will still be charged an interest rate, which depends on their income, but those currently at university will be charged the full interest rate.
Steph Horn, a student at the University of Essex said: “I didn’t know about the increase, I thought I would pay what I agreed on.”
Many students have confirmed they were unaware that they would be charged a higher interest fee, suggesting that some university-goers are sleepwalking into debts higher than they expected.
Despite many complaints from students, everyone who has a student loan agreed to a contract which does in fact allow increased interest rates.
The student finance declaration form states that students are charged 3% plus inflation when in full time study.
The inflation rate students pay is set on March of each year, when the country’s Retail Price Index is published.
Karina Pukinskaite, a first year criminology student, recalled when her sister was at university before the tuition fee cap rose to £9,000 in 2010, and said: “at least we are not in America”, where fees are even higher. She was not aware of the interest increase but added: “I’m not surprised we’ll be paying more.”
A further increase in tuition fees to £9,250 was also recently confirmed, and some people have blamed Brexit for the rise, following the pound’s post-referendum slump.
A second year student, Michael Smith, said he was not concerned about the increased interest on student loans. He said: “It doesn’t really matter because most of us won’t pay it all back anyway.”
Students stop paying back any outstanding loans 30 years after finishing their course, and following their studies, only pay back a certain amount depending on their income.
It would appear some students are aware of increasing university payments, but overall many are not concerned because they are somewhat protected by the student finance system.