Newsroom
Drop in interest rates on student loans
May 28, 2020
Interest rates on federal student loans will decrease again for the next academic year.
On May 15, the Department of Education announced interest rates for Direct Loans first disbursed between July 1, 2020 and June 30, 2021.
According to the Department, rates on loans disbursed next year are as follows:
- Direct Subsidized Loans and Direct Unsubsidized Loans for Undergraduate Students - 2.75%
- Direct Unsubsidized Loans for Graduate and Professional Students - 4.3%
- Direct PLUS Loans for Parents of Dependent Undergraduate Students and for Graduate or Professional Students - 5.3%
The interest rate is determined annually for all loans first disbursed during any 12-month period beginning on July 1 and ending on June 30, and is equal to the high yield of the 10-year Treasury notes auctioned at the final auction held before June 1 of that 12-month period, plus a statutory add-on percentage that varies depending on the loan type and, for Direct Unsubsidized Loans, whether the loan was made to an undergraduate or graduate student. Loans first disbursed during different 12-month periods may have different interest rates, but the rate determined for any loan is a fixed interest rate for the life of the loan.
Mapping Your Future will be updating counseling sessions, website content, the online interest rate chart, and the interest rate chart handout in the Member resources section of the Access Area.