Cost of student debt to rise

The Student Loans Company (SLC) has confirmed that interest rates on student loans will increase - meaning millions of people still repaying their debt will be worse off, The Telegraph reports.

Both those who took on the debt before 1998 and those who borrowed the money later will now pay interest on their debt - after a time when those with older loans were `effectively paid to keep hold of them`, and those with newer loans paid 0% interest.

The SLC confirmed that those who took on the debt after 1998 will now be charged 1.5% interest, while those who borrowed the money before this period will pay 4.4% interest on their outstanding balances.

So people with newer loans of £10,000 will pay £150 a year, and those with older loans of £10,000 will pay £440.

There are over 3.3 million people who are still carrying a student debt from after 1998, while around 355,000 still have `pre-1998 loan debts`.

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