Welsh Government working to protect student loan borrowers

Llywodraeth Cymru yn gweithio i ddiogelu myfyrwyr sydd â benthyciad

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.

Vikki Howells, 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.