Student loan interest rates vary each year based upon the 10 year treasury note, but there are caps on the rate.
These loans are knows as Stafford Loans, a great program for federal student financial aid.
Federal student loans help you establish credit history, so even if you don't need to take out a student loan, you may want to as a way to establish credit.
Stafford Loans may be subsidized by the U.S. government for low-income students with demonstrated need based upon their FAFSA federal student loan application, or unsubsidized Stafford loan.
Starting with 2013-14 school year, the rate for the student loans will vary each year based upon the 10 year treasury note interest rate in the June auction. They will be capped. In addition, a loan origination fee may apply.
Here are the student loan interest rates for 2016 - 2017 school year:
Undergraduate Stafford Loan - 3.76% interest rate (subsidized and unsubsidized)
Graduate Stafford Loan - 5.31% interest rate
Parent Plus Loan - 6.31% interest rate
Here are the student loan interest rates for 2015 - 2016 school year:
Undergraduate Stafford Loan - 4.29% interest rate (subsidized and unsubsidized)
Graduate Stafford Loan - 5.84% interest rate
Parent Plus Loan - 6.84% interest rate
Here are the student loan interest rates for 2014 - 2015 school year:
Undergraduate Stafford Loan - 4.66% interest
Graduate Stafford Loan - 5.41% interest
Parent Plus Loan - 7.21% interest
Loan Amounts depend on year of school, and if you are a Dependent Students (dependent upon parents for support) or Independent Student (self-supporting).
Dependent Student Subsidized Loan Maximum
1st year - $3,500 (additional $2,000 loan may be unsubsidized)
2nd year - $4,500 (additional $2,000 loan may be unsubsidized)
3rd and 4th year - $5,500 (additional $2,000 loan may be unsubsidized)
Preparatory work (to prepare to enroll in undergraduate program) - $2,625
Preparatory work (to prepare to enroll in graduate or professional program) - $5,500
Teacher certification coursework - $5,500.
Independent Student Subsidized Loan Maximum
1st year - $3,500 (additional $6,000 loan may be unsubsidized)
2nd year - $4,500 (additional $6,000 loan may be unsubsidized)
3rd and 4th year - $5,500 (additional $7,000 loan may be unsubsidized)
Graduate and professional students - up to $20,500 per year and $138,500 total ($224,000 for certain medical school students) in unsubsidized Stafford loans.
Payments on an unsubsidized Stafford loan are due to start six months after graduation, or six months after you drop below half-time status.
Only Take What You Need
Holly, Glencoe, MN USA
When I began my college career I was unsure of the unknown expenses there might be. When I received my Financial Aid Award letter I took the extra money that wasn't need to pay for school and opened a savings account. I kept the extra money as a cushion in case I needed it for an expense I had not foreseen. I promised myself I would never use the money in this account for anything except school expenses. I know of many students who use this money to go on vacation for spring break, to go shopping, etc. Once I completed my first year I took the money in my savings and paid it back so that my borrowed amount was reduced. I followed the same rule throughout my college career and it has reduced my student loans by several thousand dollars.
For additional advice from other students, see Paying off Student Loans