New hikes in the cost of student loans

In April of this year, the government announced an inflation rate according to the Retail Prices Index (RPI), of 3.1 per cent. No one really noticed. Why? Well because the RPI hasn’t really had much relevance to most of us since 2003 when it was unofficially replaced as a way of measuring the average price of goods by the Consumer Prices Index (CPI). However, the RPI was once the measure of choice and still remains very relevant for students or those who have recently graduated. For that group of people the RPI increase could be very bad indeed. Why is the RPI affecting students? Although the CPI is now the measure for the average price of goods, it’s the RPI to which student loan interest rates are tethered. And it’s the inflation rate that was recently announced that will be used to calculate how much interest is due to be paid from next September onwards. So, although the reception to the RPI rise was minimal, there are actually hundreds of thousands of people all over the UK


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