The Welsh Government has agreed in principle to the UK
Government's proposal to cap interest rates on Plan 2 and Plan
3 student loans at 6% from September 2026, for the
2026/27 academic year.
Any formal decision to proceed in Wales, including
Regulations, is a matter for the next Welsh Government and
subject to Senedd approval.
, Minister for Further and
Higher Education, said:
“I am pleased to support the proposed cap on student loan
interest rates because of the protection it will offer for
student loan borrowers in Wales. A final decision on applying the
interest rate cap for Welsh borrowers will need to be taken by
the next Welsh Government, following the Senedd election.”
Notes to editors
Notes
- This proposal is separate from, and does not affect, the
Welsh Government's position on the recent Plan 2 repayment
threshold freeze. The First Minister has confirmed in the Senedd
that the freeze does not apply to Welsh borrowers.
- Welsh Ministers
have indicated in‑principle agreement to the UK
Government's proposal to cap Plan 2 and Plan 3 student loan
interest rates, recognising the
potential protection this
could offer borrowers in Wales.
- Only Welsh Ministers can set the interest rate for student
loans in Wales.
- It will be for the next Welsh Government to take
final decisions on how to proceed.
