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The UK government has announced a cap on interest rates for student loans at 6% for plan 2 and 3 loans, starting from September. This move has been welcomed by Labour MPs, who see it as a sign that the government is willing to reform the student loan system.
The UK government has capped interest rates for student loans at 6%. This change will protect borrowers from short-term increases in inflation due to global shocks. Currently, graduates on plan 2 student loans pay back 9% of everything they earn over a certain salary. The interest rate cap will have no impact on monthly repayments but will reduce the total amount owed. Labour MPs have welcomed the move, seeing it as a sign that the government is willing to reform the student loan system. The government's decision comes after pressure from opposition parties and thinktanks over the student loan system. A cross-party group of MPs is preparing to launch an inquiry into the system.
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