Interest rates are established each year for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans for which the first disbursement is on or after July 1 through June 30. The chart below displays the resultant interest rates for Federal Direct Loans by loan and borrower type for the 2014-15 and 2015-16 disbursement periods:
|Loan Type||Borrower Type||July 1, 2015 –June 30, 2016||July 1, 2016–June 30, 2017|
|Direct Subsidized Loans||Undergraduate Students||4.29%||3.76%|
|Direct Unsubsidized Loans||Undergraduate Students||4.29%||3.76%|
|Direct Unsubsidized Loans||Graduate/Professional Students||5.84%||5.31%|
|Direct PLUS Loans||Parents of Dependent Undergraduate Students and Graduate/Professional Students||6.84%||6.31%|
Under the interest rate structure referenced above, all Direct Loans except Direct Consolidation Loans will be “variable-fixed,” meaning students would receive a new market-based rate with each new loan taken in subsequent school years, but then that rate would be fixed for the life of the loan. The new law also protects borrowers from market spikes by enforcing rate caps (8.25% for Direct Subsidized Loans and Direct Unsubsidized Loans for undergraduate students, 9.50% for Direct Unsubsidized Loans for graduate/professional students; and 10.50% for parent and graduate PLUS.).
In addition to interest, all Federal Direct Loans (subsidized and unsubsidized) have a 1.073% origination fee, disbursed on or after October 1, 2014 and before October 1, 2015. This is deducted from the loan at the time of disbursement. For example, if you borrow $5,500 for the academic year, a total of $59.01 will be deducted from your loan amount and paid directly to the U.S. Department of Education. Thus, the annual net amount typically over the course of two academic semesters of the loan that would credit or disburse to your account is approximately $5,440.99.
For Direct Subsidized Loans and Direct Unsubsidized Loans where the first disbursement is made on or after October 1, 2015 and before October 1, 2016, the origination fee will be 1.068 percent (e.g., the fee on a $5,500 loan would be $58.74). For Direct Subsidized Loans and Direct Unsubsidized Loans where the first disbursement is made on or after October 1, 2016 and before October 1, 2017, the origination fee will be 1.069% (e.g., the fee on a $5,500 loan would be $58.79).
For Direct PLUS Loans where the first disbursement is made on or after October 1, 2015 and before October 1, 2016, the fee would be 4.272 % (e.g., the fee on a $10,000 PLUS would be $427.20). For Direct PLUS Loans where the first disbursement is made on or after October 1, 2017 and before October 1, 2017, the fee would be 4.276 % (e.g., the fee on a $10,000 PLUS would be $427.60).
- Federal Direct Subsidized Loan
- Federal Direct Unsubsidized Loan
- Federal Direct Loan Interest and Fees
- How to Apply for a Federal Direct Loan
- E-sign the Federal Direct Loan Master Promissory Note (MPN)
- Federal Direct Loan Entrance Counseling
- Receiving Federal Direct Loan Funds
- Request Reduction or Cancellation of Federal Direct Loans
- Federal Direct Loan Limits
- Federal Direct Loan Exit Counseling
- Federal Direct Loan Repayment
- Additional Federal Direct Loan Information