UK government has announced that the maximum interest rate on Plan 2 and Plan 3 student loans will be capped at 6 % from 1 September 2026, for the 2026/27 academic year. The cap replaces the current rate of RPI plus 3 % and is intended to give borrowers certainty amid inflationary pressures. The measure applies to borrowers in England and Wales and will limit interest to no more than 6 % even if the Retail Price Index rises. The announcement follows earlier changes that raised the Plan 2 repayment threshold to £29,385 in April 2026. The move is part of a broader review of the student finance system, which includes the reintroduction of maintenance grants from 2028/29.
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