The UK government announced it will cap interest on England’s Plan 2 student loans at 6% for the 2026–27 academic year, along with a similar cap for postgraduate Plan 3 loans. The stated rationale ties the change to protecting borrowers from inflation risk associated with global shocks, including the Iran war. Under the policy, Plan 2 interest is typically set as the Retail Prices Index (RPI) plus up to 3%, with the specific cap mechanism triggered when inflation risk is judged to be too high. The government previously used caps during earlier inflationary windows, including 2021–22 and again from September 2022 to August 2024. Student advocates welcomed the move as a partial concession while calling for additional fixes, including reversing repayment-threshold freezes and aligning thresholds with income. For UK higher-education institutions, the change may affect graduate affordability pressures and could shape how universities anticipate demand for financial advice, retention support, and graduate outcomes reporting.