Income Contingent Loans (ICL) - Maximum Loan Rates
Part of these loans are means tested and there are exceptions to these rates. Students should contact their local award authority for full details.
Interest Rate
The amount to be paid back will depend on the amount borrowed plus the interest charged. Interest is linked to the rate of inflation and is adjusted each year in line with the Retail Prices Index (RPI). From 1 September 2008 to 4 December 2008 this was 3.8%*. See previous years' interest rates.
*Change to Income Contingent Repayment loan interest rate
The interest rate payable on income based student loans has been reduced following the latest change to the Bank of England rate to 2% on Thursday 4th December. The new rate for income based student loans is 3% from 5th December until further notice. Interest is applied to loans from the date they are paid to you until they are repaid in full.
Why has it changed?
Student loans are not like commercial loans. They are subsidised by Government and attract a low cost interest rate. This interest rate is based on the annual March Retail Price Index (RPI) or the highest base rate of a number of major banks plus 1%; whichever is lower.
To date, the RPI has always been the lower of the two. The reduced bank base rate plus 1% is now lower than the March 2008 RPI so we have presently adjusted the student loan rate to 3%.
However, if the bank base rate goes up again, then the interest will also go back up again - although it will not exceed this year's rate of 3.8%.
Who this will affect?:
• Anyone who has a student loan for a course starting after September 1998 and has not paid the balance in full.
• Applicants for Maintenance Loans in the current and next academic year.
• Applicants for Tuition Fee Loans in the current and next academic year.
You will not be affected by the change in rate if you took your loan out for a course starting before September 1998. Your loan is repaid through a fixed term (Mortgage Style) repayment scheme. You will be charged interest, based on the RPI. The interest rate is currently 3.8% for the period 1st September 2008 to 31st August 2009 and is reviewed annually.
Take Up Figures 1991-2005
Useful figures on the take up of loans in the period 1991-2005.
Mortgage Style Loans Only
Students who started in higher education before September 1998 would have taken out a fixed-term (mortgage style) loan. Repayment of this type of loan can be deferred on a yearly basis if the repayer's income is below 85% of the national average. Find out more about the deferment threshold and maximum loan available.
Income Contingent Loans - Transition Loan Scheme
Details of the Income Contingent Loan Scheme covering the period 1998/1999.
National Statistics
Further information about National Statistics can be found on the National Statistics website www.statistics.gov.uk