Student loan interest cap 'very welcomed step'

The capping of interest on some student loans in England is "a very welcomed step", the University of Worcester's vice chancellor has said.

It comes after the government announced interest rates on Plan 2 and postgraduate loans would be capped at 6% in the next academic year.

Prof David Green said he was "delighted" with the policy, but more change was needed.

"It is only a first step to making the changes that we really need to get student finance onto a firm and fair footing," he said.

Green, who is also the chief executive of the university, said he wanted the government "to ensure that universities start to benefit again from teaching grants and that tuition fees go down, and that students are allowed to borrow more or get grants".

He added: "That would avoid students studying full time and experiencing poverty while they do so."

Skills Minister Baroness Jacqui Smith said the government wanted to "defend against the consequences of far-away conflicts in an uncertain world".

Asked about the risk of increasing inflation, Green said everyone, including students at the university, were concerned about inflation.

He said: "It's important that this measure gives students a degree of relief, in the sense that they know their loan isn't going to go up by more than 6% per annum.

"That's still a great deal, of course, which underlines why we need to get to a fair system as soon as we can."

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