New Interest Rates Effective July 1, 2013
President Obama has signed the Bipartisan Student Loan Certainty Act of 2013. The new law amends the Direct Loan interest rate section of the Higher Education Act of 1965, as amended (the HEA). The new formulas apply to all Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct Graduate PLUS Loans for which the first disbursement is made on or after July 1, 2013.
The 2013-2014 Direct Loan interest rates for graduate/professional students are fixed as follows:
- 5.41% for Direct Unsubsidized Loans
- 6.41% for Direct Graduate PLUS Loans
These interest rates are effective for all Direct Loans disbursed between July 1, 2013 and June 30, 2014. The interest rates are calculated using a base 10-year Treasury Note Index of 1.81% plus an add-on amount for each loan program--3.60% for Direct Unsubsidized Loans for graduate/professional students, and 4.60% for graduate PLUS.
Under the new interest rate structure, all Direct Loans except Direct Consolidation Loans will be “variable-fixed,” meaning students would receive a new rate with each new loan, but then that rate would be fixed for the life of the loan. There are also interest rate caps at 9.50% for Direct Unsubsidized Loans for graduate/professional students and 10.50% for graduate PLUS.
Detailed information on interest rate changes is available at http://ifap.ed.gov/eannouncements/080913DirectLoanInterestRate2013t2014Eff070113.html.