History of Student Loan Interest Rates

on June 6, 2017

Interest rates on Federal Stafford loans and Federal PLUS loans are set by formulas specified in the Higher Education Act of 1965.

 

The interest rates have been fixed rates since July 1, 2006. The interest rates on subsidized Federal Stafford loans for undergraduate students were reduced from 6.8 percent to 3.4 percent in a phased-in manner from 2008-09 through 2011-12. The 3.4 percent interest rate was extended for an additional year, in 2012-13. Then, Congress switched the interest rates to a formula that changes the fixed rates each July 1 for new loans only.

 

Academic Year

Fixed
vs.
Variable

Federal Stafford Loans

Federal PLUS Loans

Undergraduate

Graduate

Direct

FFEL

Subsidized

Unsubsidized

Subsidized

Unsubsidized

Parent &
Graduate

Parent &
Graduate

2017-2018

Fixed

4.45%

4.45%

NA

6%

7%

NA

2016-2017

Fixed

3.76%

3.76%

NA

5.31%

6.31%

NA

2015-2016

Fixed

4.29%

4.29%

NA

5.84%

6.84%

NA

2014-2015

Fixed

4.66%

4.66%

NA

6.21%

7.21%

NA

2013-2014

Fixed

3.86%

3.86%

NA

5.41%

6.41%

NA

2012-2013

Fixed

3.4%

6.8%

NA

6.8%

7.9%

NA

2011-2012

Fixed

3.4%

6.8%

6.8%

6.8%

7.9%

NA

2010-2011

Fixed

4.5%

6.8%

6.8%

6.8%

7.9%

NA

2009-2010

Fixed

5.6%

6.8%

6.8%

6.8%

7.9%

8.5%

2008-2009

Fixed

6%

6.8%

6.8%

6.8%

7.9%

8.5%

2007-2008

Fixed

6.8%

6.8%

6.8%

6.8%

7.9%

8.5%

2006-2007

Fixed

6.8%

6.8%

6.8%

6.8%

7.9%

8.5%


Before July 1, 2006, interest rates were variable, changing each July 1. Borrowers could lock in a variable rate as a fixed rate by consolidating the loans, which rounded the weighted average up to the nearest 1/8th of a percentage point and capped the interest rate at 8.25 percent. (Consolidation loans no longer cap the interest rate on the consolidation loan.) Interest rates were lower during the in-school and grace periods, so it was beneficial for borrowers to consolidate their loans during those periods.

 

Academic Year

Fixed
vs.
Variable

Federal Stafford Loans

Federal PLUS Loans

Undergraduate

Graduate

Direct

FFEL

In-School and
Grace Periods

Repayment
Period

In-School and
Grace Periods

Repayment
Period

Parent

Parent

2005-2006

Variable

4.7%

5.3%

4.7%

5.3%

6.1%

6.1%

2004-2005

Variable

2.77%

3.37%

2.77%

3.37%

4.17%

4.17%

2003-2004

Variable

2.82%

3.42%

2.82%

3.42%

4.22%

4.22%

2002-2003

Variable

3.46%

4.06%

3.46%

4.06%

4.86%

4.86%

2001-2002

Variable

5.39%

5.99%

5.39%

5.99%

6.79%

6.79%

2000-2001

Variable

7.59%

8.19%

7.59%

8.19%

8.99%

8.99%

1999-2000

Variable

6.32%

6.92%

6.32%

6.92%

7.72%

7.72%

1998-1999

Variable

6.86%

7.46%

6.86%

7.46%

8.26%

8.26%

1997-1998

Variable

7.65%

8.25%

7.65%

8.25%

8.98%

8.98%

1996-1997

Variable

7.65%

8.25%

7.65%

8.25%

8.72%

8.72%

1995-1996

Variable

8.25%

8.25%

8.25%

8.25%

8.98%

8.98%

1994-1995

Variable

7.43%

7.43%

7.43%

7.43%

8.38%

8.38%

1993-1994

Variable

6.22%

6.22%

6.22%

6.22%

6.64%

6.64%

1992-1993

Variable

6.94%

6.94%

6.94%

6.94%

NA

7.36%

1991-1992

Variable

GSL/SLS

GSL/SLS

GSL/SLS

GSL/SLS

NA

9.34%

1990-1991

Variable

GSL/SLS

GSL/SLS

GSL/SLS

GSL/SLS

NA

11.49%

1989-1990

Variable

GSL/SLS

GSL/SLS

GSL/SLS

GSL/SLS

NA

12%

1988-1989

Variable

GSL/SLS

GSL/SLS

GSL/SLS

GSL/SLS

NA

10.45%

1987-1988

Variable

GSL/SLS

GSL/SLS

GSL/SLS

GSL/SLS

NA

10.27%


Before October 1, 1992, there were the GSL and SLS loans. The GSL was the predecessor of the Federal Stafford loan. The SLS was similar to the Federal PLUS loan.

 

Years

Fixed vs. Variable

GSL

7/1/1988 to 9/30/1992

Variable

12M T-bill + 3.25%, 10% Cap

9/13/1983 to 6/30/1988

Fixed

8%

1/1/1981 to 9/12/1983

Fixed

9%

prior to 1/1/1981

Fixed

7%

 

Years

Fixed vs. Variable

SLS

7/1/1987 to 9/30/1992

Variable

12M T-Bill + 3.1%, cap 11%

11/1/1982 to 6/30/1987

Fixed

12%

10/1/1981 to 10/30/1982

Fixed

14%

1/1/1981 to 9/30/1981

Fixed

9%

 

Interest Rate Formulas

 

Interest rates on Federal Stafford loans and Federal PLUS loans are based on the high yield from the last 10-year Treasury Note auction in May of each year, plus a fixed margin. The last (and only) Treasury Note auction is usually held in the second week of May.

 

This table shows the margins and caps for each interest rate.

 

Date Disbursed

Type

Interest Rate Formula

Cap

7/1/2013 to present

Stafford (Undergrad)

10-Year Treasury Note + 2.05%

8.25%

Stafford (Graduate)

10-Year Treasury Note + 3.6%

9.5%

Grad PLUS

10-Year Treasury Note + 4.6%

10.5%

Parent PLUS

10-Year Treasury Note + 4.6%

10.5%


Interest rates were fixed from July 1, 2006 to June 30, 2013. Prior to July 2006, interest rates were variable and pegged to the 91-day Treasury Bill or to the Constant Maturity Treasury (CMT), as shown in this table.

 

Date Disbursed

Type

In-School Rate

Repayment Rate

Cap

7/1/2010 to 6/30/2012

Stafford

Fixed Rate of 6.8%

Fixed Rate of 6.8%

NA

PLUS

Fixed Rate of 7.9%

Fixed Rate of 7.9%

NA

7/1/2006 to 6/30/2010

Stafford

Fixed Rate of 6.8%

Fixed Rate of 6.8%

NA

PLUS

Fixed Rate of 8.5% (FFEL)

or 7.9% (DL)

Fixed Rate of 8.5% (FFEL)

or 7.9% (DL)

NA

7/1/1998 to 6/30/2006

Stafford

91-day T-bill + 1.7%

91-day T-bill + 2.3%

8.25%

PLUS

91-day T-bill + 3.1%

91-day T-bill + 3.1%

9%

7/1/1995 to 6/30/1998

Stafford

91-day T-bill + 2.5%

91-day T-bill + 3.1%

8.25%

PLUS

CMT + 3.1%

CMT + 3.1%

9%

7/1/1994 to 6/30/1995

Stafford

91-day T-bill + 3.1%

91-day T-bill + 3.1%

8.25%

PLUS

CMT + 3.1%

CMT + 3.1%

9%

10/1/1992 to 6/30/1994

Stafford

91-day T-bill + 3.1%

91-day T-bill + 3.1%

9%

PLUS

CMT + 3.1%

CMT + 3.1%

10%

 

Can I get Into...

We Know Your Chances. Do You?

What Are My Chances