In 2013, President Obama signed the Bipartisan Certainty Student Act of 2013. This act was important because now parents and students have a way to determine the interest rate for the Federal Student and Federal Parent Loans, each May. Interest rates for direct subsidized, direct unsubsidized and direct plus loans change each year on or after July 1. The Federal Student Loan Interest rate is based on the May 10 –year Treasury note plus the Department of Education add-on fees. These interest rates are fixed for the life of the loan for both the student and parent federal loans. The advantage of this student loan interest rate calculation method is that it is based on current market rates and it is a fixed rate.
There are processing fees associated with these loans. These fees will change depending on the time of year they are disbursed. The effective date of the fees change is different than the interest rate change.
The following table provides the interest for new Direct Loans made on or after July 1, 2015 and before June 30, 2016.
Federal Direct Student Loans 2015- 2016 Interest Rates
Effective for Loans First Disbursed on or after July 1, 2015 and prior to June 30, 2016
To understand the cost of your student loans. Here is the repayment amount based on a 10 year amortization repayment plan per $1,000 borrowed. This does not include added interest or fees.
Direct Undergraduate @ 4.29% = $10.53
Direct Graduate @ 5.84% = $11.02
Direct PLUS @ 6.84% = $11.53
If you need further information on the different types of loans please and how student loan intererst rates will effect your way to pay for College, go to the EFCPLUS.com resource section. Should professional advice be needed, please call our office.