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New Rules Govern Federal Loans

Congress has voted to change the interest rate on Federal student loans for new loans created on or after July 1, 2013.

The new rates are below.

  • Subsidized Stafford Loans: 0% while in school; 3.86% fixed
  • Unsubsidized Stafford Loans: 3.86% for undergraduate students; 5.41% for graduate students
  • Parent and Graduate PLUS Loans: 6.41%

The origination fee also increased from 1.04% to 1.051% for Stafford Loans; 4% for PLUS loans. Note that interest on subsidized loans does not accrue until students graduate or fall below half-time enrollment. For the most up-to-date information on eligibility, visit Federal Student Aid.

In addition, receipt of the subsidy is limited to 150% of the student's published degree program for new borrowers after July 1, 2013. For example, a student completing a 4-year bachelor's degree program will only be eligible to receive the subsidized loan for six years at maximum. This rule only applies to new borrowers who receive their first Stafford loan disbursement on or after July 1, 2013. Students in this category will still qualify for unsubsidized loans up to their lifetime borrowing aggregate amount, if all other eligibility requirements are met.


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