UK GVT Plan 1 Student Loan Rate


On Aug. 30, UK GVT reported change to Plan 1 student loan rate.


  • UK GVT reported Plan 1 student loan interest rate for Sep. 1, 2023 to Aug. 31, 2024.
  • Decision made by Department for Education (DfE), Welsh Government, and Department for the Economy in Northern Ireland (DfE NI) confirmed change to 6%.
  • Follows UK GVT Aug. 2024 confirm annual interest, threshold updates, see #222658.
  • Calculation of Plan 1 Interest Rate
  • Plan 1 student loans have an interest rate of either RPI (from Mar. prior to Sep when new interest rates are implemented) or Bank Base Rate + 1%, whichever is lower.
  • This is known as the low interest cap, and this mechanism means that the interest rate on Plan 1 loans may change as a result, if the Bank Base Rate changes.
  • Applicable rate of RPI to student loans from Sep. 1, 2023 to Aug. 31 2024 is 13.5%.
  • However, due to Bank Base Rate + 1% being lower, the low interest cap is in place.
  • On Aug. 2, 2024, the Bank Base Rate changed to 5%, and this means, from Aug. 30, 2024 the interest rate for Plan 1 loans will decrease from 6.25% to 6%.

Regulators UK GVT
Entity Types Bank; BS; CNSM; MSB
Reference PR 8/30/2024
Functions Compliance; Financial; Legal; Product Administration; Product Design; Reporting
Countries United Kingdom
Category Central Government
State
Products Banking; Education; Loan
Regions EMEA
Rule Type Guidance
Rule Date 8/30/2024
Effective Date 8/30/2024
Rule Id 224429
Linked to Rule :222658
Reg. Last Update 8/30/2024
Report Section UK

Last substantive update on 09/03/2024