Graduates to be hit with ‘brutal’ student loan interest rates of up to 12%

Most recent graduates in England and Wales will be charged 9% from September amid rising retail prices index

Interest rates on student loans are set to soar to as high as 12%, costing higher-earning graduates an extra 3,000 unless the government intervenes, according to the Institute for Fiscal Students.

Interest rates on post-2012 student loans are based on the retail prices index (RPI), with the rise in the RPI in March meaning most recent graduates in England and Wales will be charged 9% from September, up from the current rate of 1.5%.