Student Loans

The interest rate on the Stafford Loan for new loans first disbursed after July 1, 2006 is a fixed rate of 6.8%. The same rate applies to the in-school, grace and repayment periods. The interest rate on new PLUS Loans first disbursed after July 1, 2006 is a fixed rate of 8.5%.
The interest rates on existing variable rate Stafford and PLUS loans will continue to change annually on July 1, based on the last 91-day T-bill auction in May. The current interest rates on the Stafford Loan are 4.70% during the in-school and grace periods and 5.30% during the repayment period. The current interest rate on the PLUS Loan is 6.1%. These rates are expected to increase by 1.84% on July 1, 2006 to 6.54%, 7.14% and 7.94%, returning to historical average rates. FinAid recommends that students and parents who have not yet consolidated their variable rate loans do so before July 1 to lock in the current low rates. The era of historically low interest rates on student loans has ended, and families are extremely unlikely to see rates this low ever again. (Generally, it is best to consolidate your loans at least a month before the deadline, to give the lenders time to process the paperwork.)