PART 2Provisions Applicable to all Repayments

Interest rate on the loans16.

(1)

Subject to paragraph (2), during any academic year, if the Department determines that student loans will bear interest, loans bear interest at the rate which will result in an annual percentage rate of charge determined in accordance with the Consumer Credit (Total Charge for Credit) Regulations 198022 equal to the percentage increase between the retail prices all items index published by the Office for National Statistics for the two Marches immediately before the commencement of the academic year.

(2)

If the rate referred to in paragraph (1) exceeds the rate for the time being specified for the purposes of any exemption conferred by virtue of section 16(5)(b) of the Consumer Credit Act 197423 student loans bear interest at the rate so specified.

(3)

Interest is calculated on the principal outstanding daily and is added to the principal monthly.

(4)

The index of prices to which the Department is required by Article 3(8) of the Order to have regard in prescribing the rate of interest which student loans bear is the retail prices all items index mentioned in paragraph (1).

(5)

The Department must publish, at least once a year, by whatever means and in whatever media the Department thinks fit, the interest rate determined in accordance with paragraph (1) for any forthcoming academic year, subject to any variation required by virtue of paragraph (2) to be applied.

(6)

If, for any academic year, the Department determines not to charge interest on student loans, the Department must publish notice of that fact in the same manner.

(7)

If, for any academic year, the Department publishes more than one rate of interest to apply to student loans, any subsequent rate so published will replace any previously published rate as the rate to apply from the date specified in the notice.