After falling for two consecutive years, interest rates on federal student loans are now rising. The following table shows the interest rates for new Direct Loans first disbursed on or after July 1, 2017, and before July 1, 2018. The rate is fixed for the life of the loan.
New Rate 2017/2018
|
Old Rate 2016/2017
|
Available to
|
Borrowing Limits
|
|
Direct Subsidized Loans: Undergraduate Students |
4.45%
|
3.76%
|
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 ($3,500 subsidized) 2nd year: $6,500 ($4,500 subsidized) 3rd, 4th, 5th year: $7,500 ($5,500 subsidized) Max: $31,000 ($23,000 subsidized) |
Direct Unsubsidized Loans: Undergraduate Students |
4.45%
|
3.76%
|
Undergraduate students only
|
For dependent undergraduates: 1st year: $5,500 ($3,500 subsidized) 2nd year: $6,500 ($4,500 subsidized) 3rd, 4th, 5th year: $7,500 ($5,500 subsidized) Max: $31,000 ($23,000 subsidized) |
Direct Unsubsidized Loans: Graduate or Professional Students |
6%
|
5.31%
|
Graduate or professional students only Unsubsidized loans only |
$20,500 per year (unsubsidized only) Max $138,500 |
Direct PLUS Loans: Parents and Graduate or Professional Students |
7% |
6.31% |
Parents of dependent undergraduate students and 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. By contrast, with unsubsidized loans, the borrower pays the interest during these periods. Eligibility for subsidized loans is based on financial need. Only undergraduate students are eligible for subsidized loans.
If you have questions, contact the Experts at Henssler Financial:
- Experts Request Form
- Email: experts@henssler.com
- Phone: 770-429-9166