In a bid to address inflation concerns, the UK government has announced a cap on interest rates for plan 2 and plan 3 student loans at 6%, starting September 1, 2026. This decision impacts around 5.8 million undergraduate students from England and Wales who have taken out loans since September 2012. Currently, many graduates are burdened with an interest rate of 6.2%, which is calculated based on the Retail Price Index (RPI) and a fixed charge. The new cap will slightly reduce the interest burden for some borrowers, allowing their debt to grow at a slower rate. The government’s move comes as inflation rates are expected to rise, with the RPI figure for March 2026 set to be announced on April 22. While the National Union of Students has hailed the cap as a significant victory, they emphasize the need for further reforms, particularly regarding repayment thresholds. Financial experts have noted that while the cap provides some reassurance, it does not alleviate the overall financial strain on graduates.