The Federal Direct Student Loan interest rates have been determined for school year 2014-2015. The interest rates increased on average by 0.8 percent from last year.
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 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, 2014 and before June 30, 2015.
Federal Direct Student Loans 2014- 2015 Interest Rates
Effective for Loans First Disbursed on or after July 1, 2014 and prior to June 30, 2015
|Loan Type||Borrower Type||Index/10-yr Treasury Note||Add-OnFee Rate||2014-15Fixed InterestRate||LoanInterestRate
|Direct Subsidized Loan||UndergraduateStudents||2.612%||2.05%||4.66%||8.25%||1.072%||1.073%|
|Direct Unsubsidized Loans||Graduate/Professional Students||2.612%||3.60%||6.21%||9.50%||4.288%||4.292%|
|Direct Plus Loans||Parents of Dependent Undergraduate Students andGraduate/ProfessionalStudents||2.612%||4.60%||7.21%||10.50%||4.288%||4.292%|
If you need further information on the different types of loans please go to the EFC PLUS website. There are more than 50 short videos on the entire college funding and loan repayment process. Should professional advice be needed, please call our office.