Mapping Your Future: Interest rates to rise for 2021-22 academic year

COVID-19 information and resources


Interest rates to rise for 2021-22 academic year

By Beth Ziehmer

May 20, 2021

After having historically low interest rates for the 2020-21 academic year, the rates for 2021-22 will rise.

On May 19, the Department of Education announced interest rates for Direct Loans first disbursed between July 1, 2021 and June 30, 2022.

According to the Department, rates on loans disbursed next year are as follows:

  • Direct Subsidized Loans and Direct Unsubsidized Loans for Undergraduate Students - 3.73% (up from 2.75%)
  • Direct Unsubsidized Loans for Graduate and Professional Students - 5.28% (up from 4.3%)
  • Direct PLUS Loans for Parents of Dependent Undergraduate Students and for Graduate or Professional Students - 6.28% (up from 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.

As noted in the Announcement, "in response to the COVID-19 emergency relief period, the interest rate on all Direct Loans has been temporarily set at 0 percent until at least September 30, 2021. Once the COVID-19 emergency relief period ends, the rates listed in this announcement will be in effect for loans first disbursed on or after July 1, 2021."

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.