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Depending upon the program and type (fixed or variable), interest rates on some federal education loans are subject to change on July 1 of each year. Borrowers are encouraged to take this fact into consideration, and consult with the college financial aid office, when deciding whether to accept a new loan and/or consolidate existing loans.
Current interest rate information for various education loans is provided below. For further details regarding specific loan programs, click on the corresponding link(s).
Federal Stafford Loans
The interest rate on unsubsidized Federal Stafford Loans for undergraduate students, as well as subsidized and unsubsidized loans for graduate students, is fixed at 6.8%.
The interest rate on subsidized Federal Stafford Loans for undergraduate students is being gradually reduced over a period of four years, as shown below:
- Loans first disbursed 7/1/08 through 6/30/09 - fixed rate of 6%
- Loans first disbursed 7/1/09 through 6/30/10 - fixed rate of 5.6%
- Loans first disbursed 7/1/10 through 6/30/11 - fixed rate of 4.5%
- Loans first disbursed 7/1/11 through 6/30/12 - fixed rate of 3.4%
Loans disbursed prior to June 30, 2006 have a variable interest rate adjusted annually on July 1, with a maximum of 8.25%. The subsidized and unsubsidized Federal Stafford Loan variable interest rate for the period July 1, 2008 through June 30, 2009 is 3.61% for loans during in-school, grace and deferment periods, and 4.21% for loans in repayment.
Additional information regarding Federal Stafford Loan interest rates is provided on page 1 of the Stafford and PLUS Loan Interest Rates (Effective July 1, 2008 - June 30, 2009).
Federal PLUS Loans
The current Federal PLUS loan interest rate is fixed at 8.5%.
Loans disbursed prior to July 1, 2006 have a variable interest rate, adjusted annually on July 1, with a maximum of 9%. The Federal PLUS loan variable interest rate for July 1, 2008 - June 30, 2009 is 5.01%.
Additional information regarding Federal PLUS Loan interest rates is provided on page 2 of the Stafford and PLUS Loan Interest Rates (Effective July 1, 2008 - June 30, 2009) document.
Federal Perkins Loans
The interest rate is fixed at 5 percent.
Federal Consolidation Loans
The fixed interest rate is the weighted average of the interest rates in effect on the loans at the time of consolidation, rounded to the nearest higher 1/8th of one percent. The interest rate may not exceed the maximum rate of 8.25%.
Alternative Loans
Interest rates are determined by the lending institution. There is no federally-mandated maximum rate.
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