Rates For Federal Student Loans

5-year subsidized Stafford loan – $31 billion – $7,000 per year (10 years);

10-year unsubsidized private loan – $32 billion – $9,500 per year;

15-year unsubsidzed private loan – $27 billion – $6,200 per year;

Direct PLUS Loan – $12 billion – $6,500 per year (15 years);

Parent Plus Loan – $11 billion – $6,400 per year (15 years).

Rates For Federal Student Loans

Rates for federal student loans doubled on July 1st, 2018 but only if you go Direct Loan Program. Undergraduate and Graduate students who have federally subsidized student loan (Direct) and graduate school loan (FFELP) programs were affected. Subsidized Stafford Loans now cost 2.6% rather than 3.4%. Subsidized PLUS Loans went to 6.8% from 8.0%. These changes are effective immediately for borrowers. 2. Private student loans do not change their interest rate, however they should contact them directly for information about refinancing. So that’s it! I hope you enjoyed learning about the different types of student loans; now you know what you should expect with your loan payments. Good luck with your education, and remember to stay focused and keep working hard while you’re getting your degree.

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Rates For Federal Student Loans

Rates For Federal Student Loans

Annual Percentage Rate (APR)

In order to calculate the APR, we multiply the amount borrowed times the annual percentage rate. The annual percentage rates range between 2.95% and 5.41%.

Repayment Term

The repayment term is the length of time you have to repay your student loan. You may choose either a fixed-term, adjustable-rate, or graduated payment plan. If you do not pay the full balance by the due date each month, the loan servicer has the right to charge late fees, add additional principal, and/or interest to your outstanding balance. The total monthly payment shown at the top of your statement includes all applicable federal and state income tax, along with any private insurance charges.

Income Based Payments

You may make payments based on your gross adjusted income or your household’s adjusted gross income if you live in a community property state. Your loan servicer calculates your payment amounts using a computer program called the PAYE calculator.

Payment Options

There are several ways to make your payments on your student loans, depending on how much money you owe and what type of loan you have:

Fixed Monthly Payments – These options require the same payment each month regardless of how much is paid off.

Variable Monthly Payments – This option lets you make larger monthly payments toward paying down your debt faster but still pays the same amount each month.

Graduated Monthly Payments – Graduated payments are calculated based on the total amount owed and the number of months until it is paid off.

Loan Consolidation

Loan consolidation involves taking out a new loan with a lower interest rate than your current loans to reduce the amount of money you owe. Lenders often offer higher interest rates and longer repayment terms for student loans than they do for home mortgages.

How to Make Payments

Rates For Federal Student Loans

How many students have taken out loans to help finance their education? According to the U.S. Department of Education, about 45 million Americans hold student debt, including over 10 million people who owe $50,000 or more. In fact, the average college graduate carries about $28,500 in student loans. Yet, if you’re looking for ways to reduce these costs, you might want to consider refinancing your federal student loans — at least until they start going down.

You may not know it, but your federal student loan payments are currently based on interest rates set by the government back in 2008. As a result, the current rate is higher than what was being charged then (but lower than today’s high). And while those low rates were great for borrowers, they may actually be hurting you now.

That’s because, by law, private lenders cannot offer a fixed rate for federal Stafford Loan repayment. Instead, they base the cost of the loan on a variable rate tied to the Prime Rate. So, even if your payment goes down slightly, it could go up faster than inflation later.

But don’t despair! There is still hope for you, although it may take some work. If you refinance your federal student loans before October 1st, you’ll be able to lock in a fixed rate for four years. Interest rates on unsubsidized Stafford loans are 6% right now, but they can fluctuate based on financial market conditions. You can find information about how much your monthly payment would change here.

If your school doesn’t participate in the Public Service Loan Forgiveness program, don’t worry — you can still get a better deal by choosing a Direct PLUS Loan instead. On July 1st, 2015, loan balances under $10,625 will no longer count toward the 20 percent threshold. But you won’t get any benefit if your balance exceeds that amount, so it’s best to do your research before making a final decision.

To make sure you qualify, use an online calculator to determine whether you meet the requirements. If your total loan amount is less than $15,500, you can file for student loan forgiveness through the Income-Based Repayment Plan. Just make sure you apply for it before September 30th, 2016, since the deadline will change again after July 1st, 2017.

And remember, getting rid of your federal student loans won’t automatically relieve you from paying them off. To qualify for partial payment relief, you need to pay at least half of your loan principal and interest each year. You also have to make 120 qualifying monthly payments, and forgo additional payments for three consecutive years.

But, if you’d rather eliminate your federal student loans entirely, check out our Debt Relief Guide, where we explain exactly how to do that. You can learn how to consolidate loans, negotiate your payments, and even get a tax break to boot!

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