What is the interest rate and fees charged in the Direct Loan Program?
Interest: The interest rate for the Subsidized Direct Loan for undergraduates will be 4.5% for loans disbursed between July1, 2010 and June 30, 2011. The interest rate for the Unsubsidized Direct Loan is fixed at 6.8%. The interest rate for graduate students is 6.8% on subsidized and unsubsidized loans. The PLUS Direct loan interest rate is fixed at 7.9%. Origination fee: The origination fee for Subsidized and Unsubsidized Direct loans is 1% for loans disbursed after July 1, 2010. The origination fee is retained by the federal government to reduce the cost of supporting these low interest loans; however, .5% of the fee is rebated upfront to the student at the time the loan is disbursed. When loan repayment begins, the student must make the first 12 loan payments on time, otherwise the amount rebated will be reversed and charged back to the total loan amount owed. The PLUS Direct loan has a 4% origination fee and also offers a 1.5% rebate on the origination fee, resulting in a net fee o
