UK student loan interest rates capped at 6% for 2026-27

The UK Department for Education and the Student Loans Company (SLC) have announced new interest rates and repayment thresholds for the 2026-27 academic year. For Plan 2 undergraduate and Plan 3 postgraduate loans, interest rates will be capped at 6% between September 1, 2026, and August 31, 2027.

Plan 1 undergraduate loans will have an interest rate of 4.1%, which is the lower of the Retail Price Index (RPI) or the Bank Base Rate plus 1%. The repayment threshold for Plan 1 loans is set to increase to £28,005 starting April 6, 2027. Plan 5 undergraduate loans will carry an interest rate of 4.1%, matching the RPI.

In conjunction with these financial updates, the SLC has issued guidance for students preparing for university. Students participating in the extra placement process or those changing universities or courses are advised to update their information via their online accounts. The SLC emphasized that students who have already applied and have no changes to their plans do not need to take further action, but those with changes must update their details online to ensure timely financing.