"Student Loans Interest Repayments to Rise"

Vocabulary !!

Retail Price Index (RPI)- An inflationary indicator that measures the changes in the cost of a fixed basket of retail goods.

loan- An arrangement in which a lender gives money or property to a borrower, and the borrower agrees toreturn the property or repay the money, usually along with intrest, at some future points in time. Usually, there is a predetermined time for repaying a loan, and generally the lender has to bear the risk that the borrower may not repay a loan (though modern capital markets have developed many ways of managing this risk).

Interest- The return earned on an investment.

http://www.investorwords.com/2531/interest.html
http://www.investorwords.com/2858/loan.html
http://www.investorwords.com/4331/RPI.html

Since the latest rise in inflation, graduates and students will have to face the increases on the student loans in England. Nearly three hundred million students will be affected by this rise in inflation because they will not be able to afford to go to college especially since they know they will have a great amount of debt to pay as they graduate and have been educated. The Student Loans Company has reset the intrest rate which will be in effect on September 1,2010 as the level of RPI has risen in March 2010. The intrest rate has risen up to 4.4%. Depending on when the loan was taken out it can be different from person to person. For example if the loan was taken out befor ethe year 1998, then the intrest is set at the RPI in March. This means the people with these loans are now paying minus 0.4% interest after RPI. As a result of the RPI turning negative for the first time in fifty years in March 2009, but they should expect to start paying interest in September 2010. The changes have not yet been confirmed because the government needs to set the rates formally. The student loans system went into crisis last year, since the students facing delays in getting their advances. This was after the Student Loans Company took over the processing of all England's student applications for grants and loans for the academic year 2009-10 from local authorities. I predict that in order to restore our economy, the US would not increase the intrest rate on student loans. I think that would be completely foolish to do since people will still have no money to pay off four consectutive years of schooling debt. That is part of the problem that we have had from people taking out loans that they could not afford. I think that a college education should be super expensive becasue now is a time where unskilled workers are unable to find jobs to survive and to keep our economy stimulated. Where as if we had a lot of people will skills or an education then we would be able to maintain our complicated economy.


http://news.bbc.co.uk/2/hi/business/8634820.stm