When interest is applied

You’re charged interest from the day we make your first payment to you or to your university or college until your loan has been repaid in full or cancelled. Interest is added to your balance each month.

Annual interest rate changes

The interest rate is usually set on 1 September each year, based on the Retail Price Index of the previous March. The interest rate charged is normally the Retail Price Index.

However, during some periods we may apply an interest cap to ensure you’re not being charged a higher interest rate than comparable rates found in the commercial market.

What is the Retail Price Index?

It’s a measure of inflation, which measures changes to the cost of living in the UK.

What is the interest rate cap?

The Department for Education monitors comparable market rates using monthly data published by the Bank of England.

If the average comparable market rate is lower than the interest rate you’re being charged on your Plan 5 loan, we’ll apply a temporary interest rate cap, so you’re not disadvantaged. The comparable market rate is reviewed monthly and a change to the interest rate cap made if necessary.

Previous interest rates

The rates in the table apply to Plan 5 only.

Date	Interest rate
1 September 2024 to 31 August 2025	4.3%
1 August 2024 to 31 August 2024	8%
1 June 2024 to 31 July 2024	7.9%
1 April 2024 to 31 May 2024	7.8%
1 March 2024 to 31 March 2024	7.7%
1 January 2024 to 29 February 2024	7.6%
1 December 2023 to 31 December 2023	7.5%
1 September 2023 to 30 November 2023	7.3%
1 August 2023 to 31 August 2023	7.1%