New 2014-2015 Federal Loan Interest Rates

New 2014-2015 Federal Loan Interest Rates


Last year President Obama signed the Bipartisan Student Loan Certainty Act of 2013, which ammended section 455(b) of the Higher Education Act (HEA) to provide new formulas for the determination of interest rates for all Federal Direct Loan types.  Under the law the interest rate is determined each year as the "high yield of the 10-year treasury note" auctioned at the final auction prior to the June 1 preceding the July 1 of the year for which the rate will be effective, plus a statutorily defined "add-on".  The add-on differs depending on the type of the loan (Subsidized, Unsubsidized or PLUS) and the student's grade level (undergraduate or graduate). The interest rate for a loan, once established, applies for the life of the loan - that is, the loan is a fixed rate loan.

Based on this formula the chart below displays the resultant interest rates for loans first disbursed on or after July 1, 2014 and before July 1, 2015.

Loan Type Fixed Interest Rate
Direct Subsidized Loans (Undergraduate Students) 4.66%
Direct Unsubsidized Loans (Undergraduate Students) 4.66%
Direct Unsubsidized Loans (Graduate Students) 6.21%
Direct PLUS Loans (Parents and Graduate or Professional Students 7.21%

For more information, please visit Federal Student Aid at http://studentaid.ed.gov/types/loans/interest-rates