Student loan interest rates vary each year based upon the 10 year treasury note, but there are caps on the rate.
Last updated on March 21, 2023 by College Financial Aid Advice.
These loans were previously knows as Stafford Loans, so sometimes you will hear that same term used to describe federal student financial aid.
Note: Due to the historic COVID-19 pandemic, interest rates on federal student loans is temporarily reduced to 0% from Mar 13, 2020 until December 31, 2022. In addition, you may elect administrative forbearance, which means have the option to temporarily stop making these monthly payments without penalty if you choose. Also, President Biden is proposing new loan repayment plans that will limit the student loan payments based upon income. Some federal loan amounts may be forgiven based upon income level ($10,000 loans per student or $20,000 loans for Pell Grant recipients).
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.
Federal student loans for undergraduates 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 student loan.
Currently, 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 2022 - 2023 school year:
Undergraduate Student Borrowers - 4.99% interest rate (subsidized and unsubsidized)
Graduate or Professional Student Borrowers - 6.54% interest rate
Parent Plus Loan - 7.54% interest rate
Here are the student loan interest rates for 2021 - 2022 school year:
Undergraduate Student Borrowers - 3.73% interest rate (subsidized and unsubsidized)
Graduate or Professional Student Borrowers - 5.28% interest rate
Parent Plus Loan - 6.28% interest rate
Here are the student loan interest rates for 2020 - 2021 school year:
Undergraduate Student Borrowers - 2.75% interest rate (subsidized and unsubsidized)
Graduate or Professional Student Borrowers - 4.30% interest rate
Parent Plus Loan - 5.30% interest rate
Here are the student loan interest rates for 2019 - 2020 school year:
Undergraduate Student Borrowers - 4.53% interest
Graduate or Professional Student Borrowers - 6.08% interest
Parent Plus Loan - 7.08% interest
are the student loan interest rates for 2018 - 2019 school year:
Undergraduate Student Borrowers or Undergraduate Stafford Loan - 5.05% interest rate (subsidized and unsubsidized)
Graduate or Professional Student Borrowers or Graduate Stafford Loan - 6.6% interest rate
Parent Plus Loan - 7.6% interest rate
Here are the student loan interest rates for 2017 - 2018 school year:
Undergraduate Student Borrowers or Undergraduate Stafford Loan - 4.45% interest rate (subsidized and unsubsidized)
Graduate or Professional Student Borrowers or Graduate Stafford Loan - 6.00% interest rate
Parent Plus Loan - 7.00% interest rate
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
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