Politics, economics, people

Good news for graduates…

Well, OK there’s a caveat to that. It’s good news for graduates who took out student loans post 1998 and who are currently employed. Obviously the recession is having a terrible impact on recent graduates who are searching for the ever-elusive graduate scheme places as most recruiters seem to have dropped graduate recruitment quicker than you can say generation Y. Our best wishes go out to you tykes, if you want to work for us for free, you can (subject to our rigorous and yet undefined selection process).

Anyway, back to the good news. The Students Loan Company have decided, so very charitably, that due to the falling interest rates that they should make immediate reductions to the paid interest rates on student loans in the UK. The rate is normally linked for the year to RPI (retail price index) but due to the aggressive (and necessary) monetary policy employed over the last 3 months, they have enacted a clause which stipulates that the rate can be no higher than 1% above base rate. So the rate has come down from 3.8% to 2.5% on student loans with effect from 9th Jan so we should see some benefit sneaking in soon (check the official page here if you’re in doubt). The other good thing is that if inflation continues to slide back from the 5% high and the economy continues to look pretty sick, there’s a good bet that Base Rate will be due another cut or two this year. Using Student Loan Company’s logic that the paid rate can’t be more than 1% above Base Rate, we should see paid interest rates on student loans fall further. Stranger things have happened than Base Rate sliding down to 0.5% by the end of 2009 thus meaning a paid interest rate of 1.5% on student loans, a whopping 2.3% less than the originally set level.

On that note, who’s up for another Jaeger Bomb?

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