The interest rate in effect for 2012-2013 for Federal Direct subsidized loans for undergraduate students is fixed at 6.8%. Interest on this loan begins accruing when the loan is disbursed.
Refer to the chart below for applicable interest rates for the Federal Direct subsidized loan for prior years. These interest rates are only available to undergraduate students.
|First disbursement of loan made on or after:||First disbursement of loan made before:||Interest rate on the unpaid balance:|
|July 1, 2008||July 1, 2009||6.0 percent|
|July 1, 2009||July 1, 2010||5.6 percent|
|July 1, 2010||July 1, 2011||4.5 percent|
|July 1, 2011||July 1, 2012||3.4 percent|
In addition to interest, all Federal Direct Loans have a 1.0% origination fee. This is deducted from the loan at the time of disbursement. For example, if you borrow $3,500 for the academic year, a total of $35.00 will be deducted from your loan amount and paid directly to the U.S. Department of Education. Thus, the annual net amount of the loan that would credit or disburse to your account is approximately $3,465.