The interest rate of 0.59 percent is extremely modest, compared to other types of loans, but is nevertheless the highest for student loan borrowers since 2016. There are two explanations for this.
Firstly, a new calculation model for the interest has been introduced. The Riksdag hammered through this model, with a new surcharge, just before Christmas.
The interest surcharge is 0.45 percent and is intended to cover credit losses on student loans, i.e. loans that are not repaid. In that way, the vast majority of student loan borrowers have to cover for the small minority who do not pay their debt to the state.
Second, the annual base rate, which is linked to the government’s borrowing costs over the past three years, has been raised from 0 to 0.14 percent, according to a government decision before Christmas.
SEK 1,800 for the whole year
For a person with SEK 100,000 in student loans, the new interest rate means an expenditure increase of SEK 49 a month, or SEK 588 in a year. SEK 300,000 in student loans means an expenditure increase of SEK 148 a month, or SEK 1,776 in a year, according to the Central Student Support Board (CSN).
For the vast majority, the interest cost should be manageable, CSN assesses.
– The level the interest rate is at now, 0.59 percent, should not affect to any great extent. But based on the current situation in society, with inflation, high electricity prices and increased interest costs on mortgages, this is another thing that increases the household’s monthly cost, says Ann-Britt Örtelind, office manager at CSN in Gothenburg.
Several years of payment
One way to manage your student loan is to stretch the repayment over several years, and in return get a lower monthly cost. Anyone who took out a student loan in the years 2001–2021 will have the opportunity to change the payment terms in this way. Thus, they can receive the same conditions as for loans taken from 2022, when the age limit for repayment was raised to 64 years.
For those who still have to pull the personal financial emergency brake, CSN has safety rules. In case of low income or if there are special reasons, it is possible to apply for a reduction, i.e. to pay less for a period of time.
– And if you think it’s tough with quarterly payments, the first step can be to split it into monthly payments. We also encourage you to contact us early to reason about what we can help with. We would prefer to avoid the reminder fee of SEK 450, says Ann-Britt Örtelind.