NAICU Washington Update

Student Loan Interest Rates Fall to Lowest Levels in a Decade

May 16, 2016

Borrowers taking out federal loans for the 2016-17 academic year will see the interest rates on those loans drop half a point to their lowest levels in a decade. Interest rates on Stafford and PLUS loans:

  • Stafford undergraduate loans will drop to 3.76 percent from 4.29 percent.
  • Stafford graduate loans will drop to 5.31 from 5.84 percent.
  • PLUS loans will drop to 6.31 percent from 6.84 percent.

Rates are tied to the high yield of the 10-year Treasury note at the most recent auction prior to July 1, plus a fixed percentage. This year that yield was 1.71 percent.

The rates take effect July 1, and will be fixed over the life of any loans that are taken out during the 2016-17 academic year.

Loans also have an origination fee. Currently, they range from a little over 1 percent for undergraduate loans to just over 4 percent for PLUS loans. The AY 16-17 rates for origination fees have not been published.

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