Credit crunch 'could help with student loan repayments'
Published On 10 April 2008
The credit crunch could actually help students pay off their loans, an industry expert has said.Alistair Lomax, executive director of UniAid, a charity which aims to help students cope with the financial barriers to higher education, explained that their loans tended to be "insulated from the rest of the economy" as they were tied to the base rate.
He said that the rates on student loans moved with the base rate.
"So, if anything, there's going to be a positive impact to students [from the credit crunch], because the interest rates are lowered in order to keep the economy buoyant," Mr Lomax added.
"If the base rate is lowered, then the cost of repaying student loans goes down as well.
"If anything, it's the recovery factors that are put in place [following the credit crunch] that will have an impact on students. But it's actually going to make it cheaper to borrow."
The Bank of England's Monetary Policy Committee will reveal whether interest rates are put down later today (April 10th).
