Come September students could be facing higher interest rates on their loans.

On 1st September the Student Loans Company will reset the interest rate payable and this is based on the Retail Prices Index (RPI) rate of inflation in March.

Obviously the recent rise in RPI to 4.4% in March means that students should expect to see an increase from the current rate of interest they are paying on loans.

There are different rules used to set interest rates depending on when the loan was taken out. Interest rates on loans taken out before 1998 are set based on RPI in March. However, interest rates on loans taken out after 1998 are set based on RPI in March or the Bank of England Base Rate (0.5%) plus 1%, depending on which is lower.