Federal Student Loan Interest Rates Rise

on May 10, 2017

The interest rates on new federal student loans will increase by 0.69 percentage points on July 1, 2017.

 

The new interest rates will be

  • Federal Stafford Loan (Undergraduate Students): 4.45 percent
  • Federal Stafford Loan (Graduate Students): 6.0 percent
  • Federal Grad PLUS Loan: 7.0 percent
  • Federal Parent PLUS Loan: 7.0 percent

These interest rates apply to new loans made between July 1, 2017 and June 30, 2018. The interest rates on existing fixed-rate loans will not change.

 

The loan fees on new loans will remain at 1.069 percent for Federal Stafford Loans and 4.276 percent for Federal PLUS loans through Sept. 30, 2017.

 

Interest Rate Formulas for Federal Student Loans

 

Federal student loans have fixed interest rates that do not change over the life of the loan. However, each year’s new loans have a new fixed interest rate based on the last 10-year Treasury Note auction in May. The auction on May 10, 2017 had a high yield of 2.40 percent, up from 1.71 percent the year before.

 

The yield is added to fixed margins that vary based on the loan and the degree level.
 

Loan

Margin

Cap

Federal Stafford Loan (Undergraduate Students)

Yield + 2.05%

8.25%

Federal Stafford Loan (Graduate Students)

Yield + 3.60%

9.50%

Federal Grad PLUS Loan

Yield + 4.60%

10.50%

Federal Parent PLUS Loan

Yield + 4.60%

10.50%

 

See also History of Student Loan Interest Rates.

 

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