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Graduates to get student loan debt cut
Tuesday, 01 September 2009
Life after graduation
Those currently paying back their student loan through a graduate job paying more than £15,000 a year are to get it paid off without losing a penny.
The Student Loan Company is today (September 1st) resetting its rates to reflect Retail Price Index deflation, meaning that interest on the debt will now be minus 0.4 per cent and graduates can enjoy the loan being paid off for them.
However, this only affects university leavers who started higher education before 1998, with those beginning to pay tuition fees after the date receiving the standard rate of zero per cent interest.
A spokeswoman for the Student Loans Company said: "The decision has been taken because loans are already well subsidised and it would be difficult to justify to taxpayers a situation whereby students take out loans in 2009-10 and their balances are immediately reduced."
Recent figures from the Student Loans Company showed that the credit crunch has meant that 702,000 young people are not earning enough to start repaying their graduate debts.