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Rising Inflation Points to Crushing Student Debt Payments Ahead

Interest rates are set to increase three to fourfold to as high as 12% a year for some squeezed U.K. graduates.

Students cycling in Oxford, U.K.

Students cycling in Oxford, U.K.

Source: Getty Images

Student-loan interest rates in the U.K. are expected to shoot up to 12% from 4.5% for high earners — and to 9% from 1.5% for low earners — in September, according to a study released Wednesday by the Institute for Fiscal Studies, a London-based research center.

The rates for government-issued student loans in the U.K. are tied to the March reading of the retail price index, which reached 9% last month, up from 1.5% a year ago, according data released today by the Office for National Statistics.