Question to the Department for Education:

To ask the Secretary of State for Education, what estimate she has made of the long-term fiscal impact of replacing RPI with CPI for Plan 2 student loan interest.

Interest rates on student loans have been consistently linked to a widely recognised and adopted measure of inflation. Interest rates are set in legislation in reference to the Retail Price Index (RPI) (from the previous March) and are applied annually on 1 September until 31 August.

The Office for National Statistics has undertaken a substantial programme of work over the past two years to enhance how inflation is measured and this will be carried over into student loans. The Office for Budget Responsibility has confirmed that from 2030 (at the earliest), movements in RPI will be aligned with Consumer Prices Index including owner occupiers' housing costs as viewed here: https://obr.uk/box/the-long-run-difference-between-rpi-and-cpi-inflation/.