Student Loan Interest Rates and Fees

Summary: Interest rates on new federal Direct Stafford loans are fixed for the life of the loan. For loans taken out for the 2018-2019 school year, undergraduate students receive a 5.05% interest rate and graduate students receive a 6.6% interest rate. These rates could change for 2018-19. A fee of 1.066% is deducted from your loan before the funds are sent to your school.

Student Loan Interest Rates for the 2017-2018 Academic Year

Interest rates are the same for Direct Subsidized Loans and Direct Unsubsidized Loans (sometimes referred to as Stafford Loans).

Undergraduate Student with Backpack Icon

Undergraduate Student

Federal Direct Stafford Loan

Interest rate: 5.05% fixed

Origination fee: 1.062%

Graduate Student with Briefcase Icon

Graduate Student

Federal Direct Stafford Loan

Interest rate: 6.6% fixed

Origination fee: 1.062%

Direct Loan Interest Rates

Interest Rates: Fixed

Award Year Direct Loans
(Undergraduate)
Direct Stafford Loans
(Graduate)
Direct PLUS Loans
(Parent and Graduate/Professional Student)
2018-2019   5.05% 6.6%   7.6%
2017-2018  4.45% 4.45% 6.0%
2016-2017  3.76% 3.76% 5.31%
2015-2016  4.29% 4.29% 5.84%
2014-2015 4.66% 4.66% 6.21%
2013-2014 3.86% 3.86% 5.41%

For loans made up to 2013-2014 award year, it is best to contact the loan servicer to confirm the interest rate.

Fees on Direct Loans

The current fee on the Direct Stafford Loans is 1.062% * for loans disbursed (funds sent to your school) from Oct. 1, 2017 to Sept. 30, 2018.

Year
Total Loan Fees
2017-2018 (10/1/17 - 9/30/18)  1.066%**
2016-2017 (10/1/16 - 9/30/17)  1.069% *
2015-2016 (10/1/15 - 9/30/16)  1.068%
2014-2015 (10/1/14 - 9/30/15)  1.073%
2014-2015 (7/1/14 - 9/30/14) 1.072%
2013-2014 (12/1/13 - 6/30/14) 1.072%

How fees affect the total loan cost

Loan fees are basically a form of up-front interest. For example, if your loan has a 10-year repayment term, a 4% fee is the about the same as an increase of about .875% to 1% in the interest rate. If your loan has a 30-year repayment term, a 4% fee is the same as an increase of about .334% to .5% in the interest rate.

Recommendations

  1. File the FAFSA every year to maintain eligibility for student aid.
  2. When you compare different types of student loans, make sure you understand the interest rates and fees before you borrow.
  3. If you’ve hit the limits on federal student loans, but you still need additional funds to complete your education, consider other funding options.
  4. When you file your federal income taxes, be sure to take the student loan interest deduction. You can deduct up to $2,500 total in federal and private student loan interest each year.
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