Thursday, October 25, 2007

Student loan rate : Doubled to highest rate for 16 years

Graduates are having to pay double the rate of interest on their loans compared with last year. The Student Loan Company has put the rate of interest up from 2.4 per cent to 4.8 per cent making it the highest rate since 1991. It means that a graduate who went to university in London and borrowed the maximum of £17,970 could be paying back an extra £400 a year.

But many graduates and students say they only became aware of the increase when they spotted an advert in a national newspaper. Now they are hoping an online campaign will help reverse the Student Loan Company's decision. So far 15,000 people have signed up to the Facebook group "The Student Loans Rip-Off". Last month a similar group helped reverse the decision of HSBC to cut interest-free overdrafts for graduates.

The group's creator Rahul Thakrar, a student at University College London, wrote online: "This is extremely unfair, especially given the limited notice we have had to this massive change. "The aim of this group is an attempt to get this change reversed." Student Adam McGee, 21, from West Hampstead, who is studying History and Politics at Nottingham University, said: "The 2.4 per cent rate was a reasonable amount and students can live with that, but now that it has been increased by twice the amount it is indeed an absurd change - from what seemed to be something that was a 'fair' amount to a perceived greedy profit on their behalf. "They seem to be just profiteering, thinking about themselves instead of the students.

Source : http://www.dailymail.co.uk

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