What will happen to student loan repayments if there is a recession?
If you have a UK student loan which is taken directly from your salary and is linked to the rate of inflation, what is likely to happen if there is a recession, and the knock-on effects this would have? Can anyone enlighten me? A: As the student loans company work out the rate of inflation each year as defined by the retail prices index it changes annually and you are informed of this in your statement (at the moment it’s around 2.4%) Therefore this could rise or fall depending on the yearly situation, normally not by very much, however a recession could cause a more significant change. Of course you only pay back 9% of any earnings you have over £15,000 regardless of the debt you have and the interest applied so your payments themselves won’t change. All as that will happen is the yearly interest applied to your account will be higher or lower.
