"We know that the conflict in the Middle East is causing anxiety at home, and while the risk of global shocks is beyond our control, protecting people here is not."
"The caps would provide immediate protection for borrowers, supporting those who are most exposed within this already unfair system."
"We're acting now to defend against the consequences of far-away conflicts in an uncertain world."
The government will cap interest on Plan 2 and postgraduate student loans at 6% for the 2026-27 academic year. This measure aims to shield graduates from inflation risks linked to the Iran war. The Plan 2 interest rate is based on the retail prices index plus up to 3%, with the current rate at 3.2%. Previous caps were implemented when inflation was expected to rise significantly. Skills Minister Baroness Jacqui Smith emphasized the need to protect borrowers from global uncertainties and acknowledged the existing flaws in the Plan 2 system.
Read at www.bbc.com
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