The Department for Education today, 10 August 2026, announced updates to interest rates for undergraduate and postgraduate Income Contingent Student Loans, alongside changes to repayment thresholds.
For Plan 1 undergraduate loans (1998-2012), the maximum interest rate will be 4.1% for the period between 1 September 2026 and 31 August 2027. This rate is based on the Retail Price Index (RPI) of 4.1%.
The repayment threshold for Plan 1 loans is set to rise to £28,005, effective from 6 April 2027 to 5 April 2028.
Plan 2 undergraduate loans (2012-2023) and Plan 3 postgraduate loans will both have a maximum interest rate capped at 6% for the period from 1 September 2026 to 31 August 2027. Plan 5 undergraduate loans (from the 2023 academic year) will have an interest rate of 4.1%, matching the RPI.
Mortgage style loans will also see an interest rate of 4.1% from 1 September 2026 to 31 August 2027, with a deferment threshold of £44,311 for the same period.