New student loan interest rates come in

MILLIONS of students and graduates will no longer benefit from interest-free loans from next week when new borrowing rates come into force.

The Student Loans Company announced yesterday that those who took out loans after 1998 will be charged interest of 1.5 per cent during the year to August 31 2011, while people who took out loans before that date will be charged 4.4 per cent.

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These rates replace ones of 0 per cent on the post-1998 loans and minus 0.4 per cent on the pre-1998 once which have applied during the past year, after inflation, upon which the rates are based, turned negative.

The change means someone with a 10,000 loan taken out after 1998 will pay 150 in interest during the year.