Changes to Federal Loan Interest Rates for 2015-16
Interest rates for Direct Loans (Subsidized, Unsubsidized, PLUS and Direct Consolidation Loans), wherein the first disbursement is made on or after July 1, 2015, have been set by the Federal government as follows:
- Direct Subsidized 4.29%
- Direct Unsubsidized 4.29%
- Direct PLUS 6.84%
- Direct Unsubsidized Loans (for Graduate/Professional students) 5.84%
NEW FEDERAL DIRECTIVE REGARDING THE GRACE PERIOD FOR THE FEDERAL DIRECT SUBSIDIZED LOAN
Until recently, Direct subsidized loan interest has been paid by the federal government during the six month grace period, which is the period of time immediately after a student graduates, withdraws or ceases to be enrolled at least half time.
For 2012-2013 and 2013-2014, however, if you received a subsidized loan for which the first disbursement was made on or after July 1, 2012, and before July 1, 2014, you will be responsible for the interest that accrues while your loan is in the grace period.
You do not have to make payments during the grace period (unless you choose to) but the interest will be added (capitalized) to the principal amount of your loan when the grace period ends. This provision does not eliminate the interest subsidy while the borrower is in school or during eligible periods of deferment.