For the first time in three years, interest rates on federal student loans will decrease for the 2019-2020 academic year. The lower rates apply to new federal student loans made on or after July 1, 2019, through June 30, 2020. The interest rate is fixed for the life of the loan.
| New rate
2019-2020 |
Old rate
2018-2019 |
Available to | Borrowing Limits | |
| Direct Stafford Loans: Undergraduates
(Subsidized) |
4.53% | 5.05% | Undergraduate students only.
Subsidized loans are based on financial need as determined by the federal aid application (FAFSA). |
For dependent undergraduates:
1st year: $5,500 (max $3,500 subsidized) 2nd year: $6,500 (max $4,500 subsidized) 3rd, 4th, 5th year: $7,500 (max $5,500 subsidized) Max: $31,000 (max $23,000 subsidized) |
| Direct Stafford Loans: Undergraduates
(Unsubsidized) |
4.53% | 5.05% | Undergraduate students only; all students are eligible regardless of financial need | For dependent undergraduates:
1st year: $5,500 (max $3,500 subsidized) 2nd year: $6,500 (max $4,500 subsidized) 3rd, 4th, 5th year: $7,500 (max $5,500 subsidized) Max: $31,000 (max $23,000 subsidized) |
| Direct Stafford Loans: Graduate or Professional Students | 6.08% | 6.60% | Graduate or professional students only; all students are eligible regardless of financial need
Unsubsidized loans only |
$20,500 per year; max $138,500 |
| Direct PLUS Loans:
Parents and Graduate or Professional Students |
7.08% | 7.60% | Parents of dependent undergraduate students and graduate or professional students
Unsubsidized loans only |
Total cost of education, minus any other aid received by student or parent |
Subsidized vs. Unsubsidized
What’s the difference? With subsidized loans, the federal government pays the interest that accrues while the student is in school, during the six-month grace period after graduation, and during any loan deferment periods. With unsubsidized loans, the borrower is responsible for paying the interest during these periods. Only undergraduate students are eligible for subsidized loans, and eligibility is based on demonstrated financial need.
If you have questions or need assistance, contact the Experts at Henssler Financial:
- Experts Request Form
- Email: experts@henssler.com
- Phone: 770-429-9166
Disclosures: The following information is reprinted with permission from Forefield, a division of Broadridge Financial Solutions, Inc. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
