Huge number of students pay penalty rates on their loans

More than 50,000 students paid the highest rate of interest due to ‘non-compliance’ last year.

In the 2016-17 financial year, 50,980 students were put on penalty interest rates on their loans, a freedom of information request from the Telegraph discovered.

Since 2012, when students graduate the interest rate they pay on their loans is equivalent to the retail price index, if they are earning less than £21,000. If they earn more than £41,000 they pay a higher interest rate equal to the retail price index plus three percentage points.