The Education (Student Loans) (Repayment) (Amendment) Regulations 2026

Published: Mon 6th Jul 26

These Regulations amend the Education (Student Loans) (Repayment) Regulations 2009 to cap the interest rates for Plan 2 and Plan 3 student loans at 6% for a twelve-month period.

The order applies to student loan borrowers and repayment administrators in England and Wales, specifically targeting the interest calculations for undergraduate and postgraduate income-contingent loans.

The Secretary of State for Education and the Welsh Ministers exercise these powers to ensure that if the standard interest rate calculations exceed 6% between September 2026 and August 2027, the lower capped rate applies.

Arguments For

The instrument states that it provides a maximum interest rate for student loans during the 2026/27 academic year.
Accompanying notes indicate that no significant impact on the private, voluntary, or public sector is foreseen.
Proponents within the Department for Education and the Welsh Government frame these amendments as temporary measures covering the period from 1 September 2026 to 31 August 2027.

Arguments Against

Legal scholars might note that the regulations are temporary and will expire on 31 August 2027, potentially leading to interest rate fluctuations after that date.
Affected parties may question the absence of a full regulatory impact assessment, which the government deemed unnecessary based on its internal Code of Practice.
Technical observers might point out that the legal effect depends on the standard interest rate exceeding 6%, otherwise the amendment has no practical impact on the actual rate charged.

Citation, commencement and extent

These Regulations-
(a) may be cited as the Education (Student Loans) (Repayment) (Amendment) Regulations 2026,
(b) come into force on 1st September 2026, and
(c) extend to England and Wales.

This section establishes the official name of the statutory instrument and its geographical jurisdiction.

It mandates that the regulations become legally active on 1 September 2026 across England and Wales.

Expiry

These Regulations expire at the end of 31st August 2027.

This provision sets a fixed end date for the legal force of these amendments.

The regulations will cease to have effect after 31 August 2027, returning the student loan interest framework to its prior state unless new legislation is introduced.

Amendment of the Education (Student Loans) (Repayment) Regulations 2009

-(1) The Education (Student Loans) (Repayment) Regulations 2009 are amended in accordance with paragraphs (2) and (3).

(2) In regulation 21A (interest rate on plan 2 loans)-

(a) in paragraph (2), after '(4)' insert ', (4A)';
(b) in paragraph (2A), for '(2B) and (2C)' substitute '(2B), (2C) and (4A)';
(c) in paragraph (2D), for '(2E) and (2F)' substitute '(2E), (2F) and (4A)';
(d) in paragraph (4), for 'During' substitute 'Subject to paragraph (4A), during';
(e) after paragraph (4), insert-

'(4A) Where, at any time during the period commencing with 1st September 2026 and ending at the end of 31st August 2027, the annual percentage rate of charge determined under paragraph (2)(a), (b)(ii) or (iii), (c)(ii) or (iii) or (d), (2A)(a)(ii) or (iii), (b)(ii) or (iii) or (c), (2D)(b) or (c), or (4) exceeds 6%, the annual percentage rate of charge is deemed to be 6%.'.

(3) In regulation 21B (interest rate on plan 3 loans)-

(a) in paragraph (1), for 'The', in the first place it occurs, substitute 'Subject to paragraph (1A), the';
(b) after paragraph (1), insert-

'(1A) Where, at any time during the period commencing with 1st September 2026 and ending at the end of 31st August 2027, the interest rate determined under paragraph (1) exceeds 6%, the interest rate is deemed to be 6%.'..

This section modifies the existing 2009 Regulations to implement an interest rate ceiling for Plan 2 (typically undergraduate) and Plan 3 (postgraduate) student loans.

It directs that if the interest rate calculated under standard formulas—which often depend on the Retail Price Index—exceeds 6%, the rate must be treated as exactly 6% for the duration of the 2026/27 academic year.

This applies to various loan statuses, including those currently being repaid and those for students still in study.

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