What is the interest rate on Direct Loans?
A. The interest rate for both Direct Subsidized Loans is variable and is adjusted each year on July 1. The interest rate will be calculated differently depending on several circumstances. The interest rate during the in-school, grace, and deferment periods is equal to the 91-day Treasury bill rate plus 3.1 percentage points. By law, however, the interest rate can never exceed 8.25 percent. The servicing center of the loan program will notify the student each year in writing about the interest rate that will go into effect on July 1. Note that the fixed amount students pay each month will be adjusted to account for any changes in the interest rate. The length of the student’s repayment period will not be adjusted unless they request it by contacting the Servicing Center.
A. The interest rate for both Direct Subsidized Loans is variable and is adjusted each year on July 1. The interest rate will be calculated differently depending on several circumstances. The interest rate during the in-school, grace, and deferment periods is equal to the 91-day Treasury bill rate plus 3.1 percentage points. By law, however, the interest rate can never exceed 8.25 percent. The Servicing Center will notify the student each year in writing about the interest rate that will go into effect on July 1. Note that the fixed amount students pay each month will be adjusted to account for any changes in the interest rate. The length of the student’s repayment period will not be adjusted unless they request it by contacting the Servicing Center.
If you have a Stafford Loan that was first disbursed on or after July 1, 1994, the interest rate could change each year of repayment, but it will never exceed 8.25 percent. The interest rate is adjusted each year on July 1. You’ll be notified of interest rate changes throughout the life of you loan. If you had a loan prior to July 1, 1994, the interest rates might be different; check with the lender or agency that holds your loan. Is there any charge for making a Direct Subsidized or Unsubsidized Loan? You’ll be charged fees of up to 3%, deducted proportionately from each disbursement of your loan. When do I begin repayment on this type of loan? Repayment begins after you graduate, leave school or drop below half-time enrollment. Depending on when you first received a loan, your first payment would be due in six to twelve months. Of course you can make payments while in school, if you wish.this will reduce the over all amount to be repaid and the overall interest costs. Will my loan be
Below are the interest rates for student loans first disbursed on or after July 1, 1998. The rates are effective for the period July 1, 2001 through June 30, 2002: the interest rate for new student loans (Direct Subsidized and Direct Unsubsidized loans) in repayment is 5.99%. During in-school, grace, and deferment periods, the rate is 5.39%. The interest rate for new parent loans (Direct PLUS loans) is 6.79%.
