Student loan interest rates will rise across all repayment plans from September 2026, although the Government will retain a 6% cap for borrowers on Plan 2 and Plan 3.
The Department for Education (DfE) has confirmed the rates that will apply from 1 September 2026 to 31 August 2027. The cap prevents the maximum rates for Plan 2 and Plan 3 from reaching 7.1%.
Plan 1 borrowers, generally those who started undergraduate courses between 1998 and 2012, will pay interest of 4.1%, based on the retail prices index (RPI).
This is up from 3.2% in 2025/26, although still below the 4.3% rate charged in 2024/25.
Plan 2 borrowers, broadly covering undergraduates who started courses between 2012 and 2023, will pay between 4.1% and 6% of their income, depending on their income.
Without the Government cap, the maximum rate would have risen to 7.1%. The maximum was 6.2% in 2025/26 and 7.3% in 2024/25.
Postgraduate borrowers on Plan 3 will pay 6% interest. The cap again prevents the rate from reaching 7.1%. The Plan 3 rate was 6.2% in 2025/26 and 7.3% in 2024/25.
Plan 5 applies to borrowers who began undergraduate courses in 2023 or later. Their interest rate will rise from 3.2% to 4.1% for 2026/27. The rate remains below the 4.3% charged in 2024/25.
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