It’s official: Federal student loan rates will decline for the first time in three years for the 2019-2020 academic year, according to Thursday’s announcement from the federal Department of Education.
The rates are as follows:
- 4.53% for direct subsidized and unsubsidized loans for undergraduates
- 6.08% for graduate and professional students loans (all these loans are unsubsidized)
- 7.08% for parent PLUS and Graduate PLUS loans (also unsubsidized)
Interest on subsidized loans does not accrue while a student is attending school on at least a half-time basis; it accrues for all unsubsidized loans.
These are same rates (rounded up to the one-hundredth) that savingforcollege.com released a week ago, as reported by ThinkAdvisor. They are based on different spreads to the high yield reached at the May 8 10-year Treasury note auction, and they are effective for loans disbursed on or after July 1, 2019 and before July 1, 2010. They are fixed for the term of the loan.
While student loan rates are reset annually, loan limits are not. They haven’t changed in more than a decade even though the cost of college has risen substantially.