Higher Student Loan Interest Rates are Here for New Borrowers
New federal student loan interest rates are established each summer for the loans that will be borrowed during the following school year. The interest rates are based on the 10-year Treasury rate (a benchmark figure representing investor confidence). Once you borrow, your interest rate is fixed for the life of the loan.
Here are the interest rates for loans disbursed on or after July 1, 2014, and before June 30, 2015:
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For Direct Subsidized and Direct Unsubsidized Stafford Loans for undergraduates, the interest rate will be at 4.66 percent.
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Direct Unsubsidized Stafford Loans for graduate and professional students, the interest rate will be at 6.21 percent.
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For Direct PLUS Loans (for both parent and graduate student borrowers), the interest rate will be 7.21 percent.
Remember the Sequester? Yeah, that's still going on. The Budget Control Act of 2011 (the sequester law) required increases to Direct Loan fees. The loan fees charged to Direct Loan borrowers for Direct Subsidized, Direct Unsubsidized and Direct PLUS loans are rising due to the required across-the-board budget cuts.
Here are the loan fees for loans where the first disbursement is made on or after October 1, 2014 and before October 1, 2015:
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The loan fee for Direct Subsidized Loans and for Direct Unsubsidized Loans is 1.073%. For example, the fee on a $5,500 loan will be $59.01.
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The loan fee for Direct PLUS Loans (for both parent borrowers and graduate and professional student borrowers) is 4.292%. For example, the fee on a $10,000 PLUS Loan will be $429.20.
By Heather | Category: Student Loan Policy
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