The Bank of England has kept its interest rate unchanged for the first time in almost two years, bringing to an end a lengthy run of hikes that has battered borrowers. Rises in interest rates have seen borrowers pay more each month to pay off whatever they have borrowed, this includes those with mortgages.
Now, universities can charge up to a maximum of £9,250 per year for courses. Meaning for a three year course, some students will need to apply for a student loan that covers the £27,750, and that's without mentioning accommodation. The RPI tracks changes in the cost of a fixed basket of goods over time and is a good way of measuring inflation. Inflation rapidly rose over the last two years to a 42 year-high, which meant student loans soared for many who had already graduated.
Writing MoneySavingExpert, Martin Lewis says: "There's a sinking feeling as you see £1,000s of added interest. Yet student loan statements can be dangerously misleading. They've led some into making catastrophic financial decisions. For most graduates, bizarrely, interest isn't relevant. Ignore it, and it'll go away."
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