Interest Rates and Fees | Federal Student Aid

Understand how interest is calculated and what fees are associated with your federal student loan.

Remember, you may find that interest rates and fees are lower for federal student loans than private student loans.

Interest Rates and Fees

If you receive a federal student loan, you will be required to repay that loan with interest. It is important that you understand how interest is calculated and the fees associated with your loan. Both of these factors will impact the amount you will be required to repay. 

Learn how the automatic federal budget cuts, known as the “sequester,” will affect your Direct Loan fees.

What is interest?
What are the interest rates for federal student loans?
Who sets interest rates for federal student loans?
How is interest calculated?
What is the interest rate factor?
How can I determine how much of my payment will go toward my outstanding principal balance?
Are there any other fees for federal student loans?
What are the interest rates on federal student loans first disbursed prior to July 1, 2014?


What is interest?

Interest is money paid to the lender in exchange for borrowing money. Interest is calculated as a percentage of the unpaid principal amount (loan amount) borrowed. 

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What are the interest rates for federal student loans?

The interest rate varies depending on the loan type and (for most types of federal student loans) the first disbursement date of the loan. The table below provides interest rates for Direct Loans first disbursed on or after July 1, 2014.

Perkins Loans (regardless of the first disbursement date) have a fixed interest rate of 5%.

Interest Rates for Direct Loans First Disbursed on or After July 1, 2014

Loan Type

Borrower Type

Loans first disbursed on or after 7/1/14 and before 7/1/15

Loans first disbursed on or after 7/1/15 and before 7/1/16

Direct Subsidized Loans

Undergraduate

4.66%

4.29%

Direct Unsubsidized Loans

Undergraduate

4.66%

4.29%

Direct Unsubsidized Loans

Graduate or Professional

6.21%

5.84%

Direct PLUS Loans

Parents and Graduate or Professional Students

7.21%

6.84%

All interest rates shown in the chart above are fixed rates for the life of the loan.

Note: The interest rates for federal student loans are determined by federal law. If there are future changes to federal law that affect federal student loan interest rates, we will update this page to reflect those changes.

View the interest rates on federal student loans first disbursed before July 1, 2014.

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Who sets interest rates for federal student loans?

Interest rates on federal student loans are set by Congress.

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How is interest calculated?

The amount of interest that accrues (accumulates) on your loan from month to month is determined by a simple daily interest formula. This formula consists of multiplying your loan balance by the number of days since the last payment times the interest rate factor.

Simple daily interest formula:

Outstanding principal balance
x number of days since last payment
x interest rate factor
= interest amount

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What is the interest rate factor?

The interest rate factor is used to calculate the amount of interest that accrues on your loan. It is determined by dividing your loan's interest rate by the number of days in the year.

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How can I determine how much of my payment will go toward my outstanding principal balance?

Your loan servicer can tell you how much of your payment is applied to your principal balance. Find out more about loan servicers.

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Are there any other fees for federal student loans?

Most federal student loans have loan fees that are a percentage of the total loan amount. The loan fee is deducted proportionately from each loan disbursement you receive. This means the money you receive will be less than the amount you actually borrow. You're responsible for repaying the entire amount you borrowed and not just the amount you received.

The chart below shows the loan fees for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed on or after Oct. 1, 2014.

Loan Type

First Disbursement Date

Loan Fee

Direct Subsidized Loans and Direct Unsubsidized Loans

On or after 10/1/14 and before 10/1/15

1.073%

On or after 10/1/15 and before 10/1/16

1.068%

Direct PLUS Loans

On or after 10/1/14 and before 10/1/15

4.292%

On or after 10/1/15 and before 10/1/16

4.272%

Loans first disbursed prior to Oct. 1, 2014, have different loan fees.

There are no loan fees for Perkins Loans.

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What are the interest rates on federal student loans first disbursed before July 1, 2014?

The following table provides interest rates for Direct Loans and Federal Family Education Loan (FFEL) Program loans** first disbursed on or after July 1, 2006, and before July 1, 2014.

Perkins Loans (regardless of the first disbursement date) have a fixed interest rate of 5%.

Loan Type

Borrower Type

First Disbursement Date

Fixed Interest Rate

 

Direct Subsidized Loans*

 

 

 

 

 

 

Undergraduate

 

 

 

 

 

 

 

 

7/1/13–6/30/14

3.86%

7/1/11–6/30/13

3.4%

7/1/10–6/30/11

4.5%

7/1/09–6/30/10

5.6%

7/1/08–6/30/09

6.0%

7/1/06–6/30/08

6.8%

Graduate or Professional

7/1/06–6/30/12

6.8%

Subsidized Federal Stafford Loans**

Undergraduate

7/1/09–6/30/10

5.6%

7/1/08–6/30/09

6.0%

7/1/06–6/30/08

6.8%

Graduate or Professional

7/1/06–6/30/10

6.8%

Direct Unsubsidized Loans

 

 

 

Undergraduate

7/1/13–6/30/14

3.86%

Graduate or Professional

7/1/13–6/30/14

5.41%

Undergraduate and Graduate or Professional

7/1/06–6/30/13

6.8%

Unsubsidized Federal Stafford Loans**

Undergraduate and Graduate or Professional

7/1/06–6/30/10

6.8%

 

Direct PLUS Loans

Parents and Graduate or Professional

7/1/13–6/30/14

6.41%

Parents and Graduate or Professional

7/1/06–6/30/13

7.9%

Federal PLUS Loans**

Parents and Graduate or Professional

7/1/06–6/30/10

8.5%

*As of July 1, 2012, graduate or professional students are no longer eligible to receive subsidized loans.

**No new FFEL Program loans have been made since July 1, 2010.

Most loans (excluding Perkins Loans) first disbursed prior to July 1, 2006, have variable interest rates that are effective from July 1 of one year through June 30 of the following year. Interest rates for these loans are not displayed on this site. For information about any variable-rate loans you may have, contact your loan servicer.

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