Fixed Interest Rate

"Fixed Interest Rate" submitted by SchoolGrantsfor Editorial Team and last updated on Monday 9th January 2012

An interest rate that remains the same for the life of the loan. Subsidized Stafford Loans made to undergraduate students with a first disbursement date between July 1, 2009, and June 30, 2010, have a fixed interest rate of 5.6%.

Subsidized Stafford Loans made to graduate students have a fixed interest rate of 6.8%.

All unsubsidized Stafford Loans (for both undergraduate and graduate students) have a fixed interest rate of 6.8%.

FFEL PLUS Loans have a fixed interest rate of 8.5% for FFEL PLUS Loans and 7.9% for Direct PLUS Loans.

Direct PLUS Loans have a fixed interest rate of 7.9%. The Federal Perkins Loans rate is 5%.

The interest rate on subsidized Stafford Loans made to undergraduate students, with a first disbursement date on or after July 1, 2008, will be reduced in future years, as shown in the following chart:

Interest Rate Reductions for Subsidized Stafford Loans Made to Undergraduates

First disbursement of a loan Interest rate on the unpaid balance
Made on or after And made before
July 1, 2010 July 1, 2011 4.5%
July 1, 2011 July 1, 2012 3.4%

Note: These interest rate reductions do not affect the interest rates of any prior Subsidized Stafford Loans made to undergraduate borrowers; the interest rates on those prior loans remain unchanged. The reduced interest rates apply only to subsidized Stafford Loans made to undergraduate students. Subsidized Loans made to graduate students and unsubsidized Stafford Loans made to all students (undergraduate or graduate) have a fixed interest rate of 6.8%.

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