Regulation 21A Interest rate on plan 2 loansF1F51

This regulation applies in relation to F2plan 2 loans.

Subject to paragraphs F3(2A), (2B), (2C), F4(2D), (2E), (2F), F5... F6... (4) F7, (4A) and (5), during any academic year, if the Authority determines that F8plan 2 loans will bear interest, loans bear interest at the rate which will result in an annual percentage rate of charge determined in accordance with F9total charge for credit rules equal to—

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Subject to paragraphs F16(2B), (2C) and (4A) F17..., during any academic year or part of any academic year, where a borrower makes repayments in accordance with regulation 18 or repays all of the outstanding balance of the F18loan under regulation 15(1), F19the loan bears interest at the rate which will result in an annual percentage rate of charge determined in accordance with total charge for credit rules equal to—

The interest income applied in paragraph (2A) will be from the tax year in which—

Where a borrower repays all of the outstanding balance of the F24loan under regulation 15(1) in the tax year specified by regulation 15(2), F25the loan bears interest at the rate which will result in an annual percentage rate of charge determined in accordance with total charge for credit rules equal to the standard interest rate.

Subject to paragraphs F27(2E), (2F) and (4A) F28..., for a borrower to whom Part 4 applies and has applied for the whole or part of the previous tax year, where the borrower repays all of the outstanding balance of the F29... loan by way of deductions from earnings under Part 4 during the tax year beginning on 6 April 2019, any subsequent tax year or any part of those tax years, that loan bears interest at the rate which will result in an annual percentage rate of charge determined in accordance with total charge for credit rules equal to—

The interest income applied in paragraph (2D) will be from the tax year in which a borrower repays all of the outstanding balance of the F30... loan by way of deductions from earnings under Part 4 where—

Where, during the tax year beginning on 6 April 2019 or any subsequent tax year or any part of those tax years, a borrower repays all of the outstanding balance of the F31... loan by way of deductions from earnings under Part 4 in the tax year specified by regulation 15(2), that loan bears interest at the rate which will result in an annual percentage rate of charge determined in accordance with total charge for credit rules equal to the standard interest rate.

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F34Subject to paragraph (4A), during F35... any academic year or part of any academic year beginning on or after 6 April 2016, where a borrower fails to comply with one or more of regulations 22, 23(4) and 72, F36their loan bears interest at the rate which will result in an annual percentage rate of charge determined in accordance with total charge for credit rules equal to the standard interest rate plus 3% for the period from the date the borrower fails to comply with one or more of regulations 22, 23(4) and 72, until the borrower complies with those regulations.

Where, at any time during the period commencing with 1st September 2026 and ending at the end of 31st August 2027, the annual percentage rate of charge determined under paragraph (2)(a), (b)(ii) or (iii), (c)(ii) or (iii) or (d), (2A)(a)(ii) or (iii), (b)(ii) or (iii) or (c), (2D)(b) or (c), or (4) exceeds 6%, the annual percentage rate of charge is deemed to be 6%.

Where a borrower changes their mode of study between full-time and part-time study the interest under paragraph (2)(a) is to be calculated as if the course is a—

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

The Authority must publish, at least once a year, by whatever means and in whatever media the Authority thinks fit, the interest rate determined in accordance with paragraphs (2) and (4) or where relevant paragraph (3), for any forthcoming academic year or part of that year.

If, for any academic year, the Authority publishes more than one rate of interest to apply to F38plan 2 loans, any subsequent rate so published will replace any previously published rate as the rate to apply from the date specified in the notice published in accordance with paragraph (7).

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The additional interest rate is a percentage equal to 3 x (I - L)/(H - L) where—

• I is the borrower’s interest income,

• L is the lower interest threshold,

• H is the higher interest threshold.

The borrower’s interest income is—

This regulation is subject to the following—

In this regulation—

• “higher interest threshold” means the higher interest threshold set out in, or calculated in accordance with, regulation 21AA;

• “lower interest threshold” means the lower interest threshold set out in, or calculated in accordance with, regulation 21AB.

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