Student loans interest could be banished
24/11/08
As a result of inflation forecasted to fall by under zero per-cent the interest on student loans could be wiped away. RPI, retail price index which is a measure of inflation and was announced last by the Bank of England last week could become negative. The retail price index is linked to student loans.
RPI figures are down, with a fall to 4.2% last month which is five per-cent down from September’s figures. The way student loan interest figures are worked out is that they are based on RPI and set in March ready for the next September. A spokesperson for Department and Innovation, Universities and Skills (DIUS) commented, “We always use RPI to set rates on student loans and this remains the case.”
On the other hand if RPI was negative, the department was unsure about how to deal with the case.
A spokesperson said “Ministers will be considering options should RPI ever to go negative and will make a decision in due course.”
