Graduates Kept In the Dark Over Student Loan Interest Rates

Fri, 08 May 2009

The government should inform graduates of the interest they are expected to pay on their student loans, according to financial advice website Moneyfacts.co.uk.

The call comes after the retail price index (RPI), which is used to fix the student loan interest rate each year, dropped below zero last month for the first time in fifty years.

As a result, some experts suggest that students in the UK could see the interest charged on their loans wiped off as deflation kicks in.

Ricky Bruce, financial researcher at Moneyfacts.co.uk believes that the government is keeping graduates in the dark by not commenting on the change in RPI and has called for student borrowers to be made are aware of RPI forecasts so that they are able to plan ahead.

He said: "If you're expecting [RPI] to go higher in the future at some point - which, with long term forecast for RPI, you just don't know - it would make sense to pay off whatever debts are going to cost you the most at this point."
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