Student debt management affected by inflation
Student debt management affected by inflation
- Wednesday, 21 April 2010Student
debt problems could be made worse as loan rates might increase in the autumn, but money expert Martin Lewis has advised students and graduates not to panic.
Higher interest rates may be announced by the Students Loans Company in September, following the hike in inflation last month.
Every September the interest rate payable is reset based on the Retail Price Index, which rose to 4.4 per cent in March; if interest is higher student debt will take longer to clear.
Martin Lewis, of consumer website MoneyExpert.com, said: "Much is still uncertain, so the best thing to do right now is sit tight. Don't overpay your student loan, and if you've spare cash put it in the highest interest savings account you can as loans are currently interest free."
He added that spare cash should be used to clear debt from mortgages or other forms of borrowing before the student loan as it is the least expensive debt.
These fears follow the Office for National Statistics revelation that inflation grew to 3.4 per cent in March because of rising fuel, energy and food prices.

Recent Debt Management Plan News
56% of Brits have no life insurance which could leave family with debt problems
Wed, 04 May 2011More than half of UK adults currently have no life insurance cover, which could mean their loved ones are left with
debt problems when they die...
Brits thinking about retirement advised to seek debt advice
Tue, 03 May 2011Consumers considering their retirement options have been advised to seek professional advice, as they may end up with
debt problems in the future...
Brits planning to attend a wedding should start saving to avoid debt problems
Thu, 28 Apr 2011Consumers concerned about getting into
credit card debt to pay to attend a wedding may want to use their savings instead...
Couples planning their big day can avoid debt problems by negotiating a cheap wedding
Wed, 27 Apr 2011Couples-to-be worried about needing
debt advice in the future after paying for a wedding can ensure they avoid accruing
debt problems by negotiating a cheap wedding...