What is the interest rate?
The interest rate for loans disbursed between July 1, 1998, and June 30, 2006, will continue to be adjusted each year on July 1, though for Stafford loans it will never be higher than 8.25%. However, Stafford loans disbursed on or after July 1, 2006, have a fixed interest rate of 6.8%, with the exception that subsidized loans disbursed on or after July 1, 2008, to undergraduate students will have an interest rate of 6.00%. Direct PLUS Loans have a fixed rate of 7.9%. You can find out more by going to the calculator page.
Students may choose either a fixed interest rate or a variable interest rate. The fixed interest rate is a simple rate, calculated on the principal amount borrowed. The variable interest rate is re-set annually on July 1st and will never be higher than 4 points above the rate at which the loan is made. THECB does not capitalize the interest at any time during the life of the loan.
