7 April 2026
If you are covering the interest rate cap introduced for Plan 2 student loan borrowers, please see the following comment from Ian Futcher, financial planner at Quilter:
"The interest rate cap may dominate the headlines, but it does little to change the financial reality graduates are living with. The real pressure point is the frozen repayment threshold, which is pulling more people into repayments earlier, as wages rise but still struggle to keep up with rising costs.
"For lower earners, that means student loans increasingly bite at the same time as rent, energy bills and everyday living costs remain stubbornly high. Add in record house prices and larger deposits, and many graduates are finding their disposable income squeezed from multiple directions before they have even had a chance to build any financial resilience.
"For middle and higher earners, the challenge is different. They are more likely to repay their loans in full, so capping interest can reduce the final bill, but long repayment periods still drain cash that could otherwise go towards saving for a home, building investments or paying into a pension.
"Against that backdrop, the cap offers reassurance but not relief. Without movement on the repayment threshold, graduates will continue to feel the strain, not because of headline interest rates, but because student loan repayments sit alongside some of the toughest housing and cost of living conditions seen in a generation.”
