RIP Laura Buckley Noonan
Search
06 Sept 2025
Search
06 Sept 2025
Please allow ads as they help fund our trusted local news content.
Kindly add us to your ad blocker whitelist.
If you want further access to Ireland's best local journalism, consider contributing and/or subscribing to our free daily Newsletter .
Support our mission and join our community now.
To continue reading this article, you can subscribe for as little as €0.50 per week which will also give you access to all of our premium content and archived articles!
Alternatively, you can pay €0.50 per article, capped at €1 per day.
Thank you for supporting Ireland's best local journalism!
Student loan interest rates will be capped to a maximum of 7.3% for a year to guard against soaring inflation, the Government has announced.
Borrowers were due to face a 12% interest rate in September due to a rise in Retail Price Index (RPI) inflation, the Department for Education (DfE) said.
However the Government has decided to intervene ahead of the point that interest rates on student loans are usually confirmed for the coming year, in August, to “provide greater clarity and peace of mind for graduates at this time”.
The cap, applying from September 2022, will not affect monthly repayments, which are based on income.
Rather, it means people who have taken out loans will owe less in the long term than they would have done if interest rates had not been capped below 12%.
The DfE described the move as “the largest scale reduction of student loan interest rates on record”.
It said it will mean, for example, someone with a balance of £45,000 would reduce their accumulating interest on the total value of the loan by around £180 per month, compared to 12% interest rates.
The change affects those on Plan 2 (undergraduate) and Plan 3 (postgraduate) loans.
Michelle Donelan, the higher and further education minister, said: “The Government has always been clear that where it can help with rising prices we will, and I will always strive for a fair deal for students, which is why we have reduced the interest rate on student loans down from an expected 12%.
“I want to provide reassurance that this does not change the monthly repayment amount for borrowers, and we have brought forward this announcement to provide greater clarity and peace of mind for graduates at this time.
“For those starting higher education in September 2023 and any students considering that next step at the moment, we have cut future interest rates so that no new graduate will ever again have to pay back more than they have borrowed in real terms.”
In February, it was announced that students starting university courses in 2023/24 will have to begin paying back their loans once they are earning more than £25,000.
Interest rates will be cut for new students so their loan balance rises with the rate of inflation.
Subscribe or register today to discover more from DonegalLive.ie
Buy the e-paper of the Donegal Democrat, Donegal People's Press, Donegal Post and Inish Times here for instant access to Donegal's premier news titles.
Keep up with the latest news from Donegal with our daily newsletter featuring the most important stories of the day delivered to your inbox every evening at 5pm.
This publication supports the work of the Press Council of Ireland and Office of the Press Ombudsman, and our staff operate within the Code of Practice of the Press Council. You can obtain a copy of the Code, or contact the Council, at www.presscouncil.ie, Lo-call 1800 208 080 or email: info@presscouncil.ie.
