Blog 9 (Students loans interest repayments to rise)

RPI - Retail Prices Index
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SLC - Student Loan Comnpany
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loan - the act of lending; a grant of the temporary use of something ; something lent or furnished on conditioned of being returned, esp. a a sum of money lent at interest
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This article talks about how an estimated three million graduates and students can expect to see a cost rise in school next September. Based on the RPI inflation rate of March, the SLC resets the interest rates on September 1. The interest rate was zero for some students, but now the RPI increased to 4.4% in March. The interest rate for student loans varies for each student because it depends on when the loan was taken out. Students who took out loans before the year of 1998, the interest rate is set to the RPI of March. The people with those loans are paying a negative 0.4% interest rate after RPI turned negative for the first time in 50 years since March of last year. Those people can now expect to start paying interest rates in September. The interest rate on loans that were taken out after 1998 will be set to the RPI in March or the Bank of England Bank which is o.5% plus 1%. These changes have not been confirmed yet because the government needs to formally set the rates.

* I think that more and more students will think twice about college because of the cost rise that will happen in September. The cost rise happens to fall during my generation and a lot of people I know plan to go away for college this fall. Because cost rise will increase, some people might drop out of school and others will most likely be paying off their student loans double the amount of time that it would usually take.

http://news.bbc.co.uk/2/hi/business/8634820.stm