Loan Interest Rates

What’s the Issue?

The interest rates on Federal education loans change on July 1, and are based on the 91-day rate from the last Treasury auction in May and the average one-year constant maturity Treasury yield for the last calendar week ending on or before June 26th. 

How does this affect me?

In the following table, the In-School Rate includes grace and deferment periods, and the Repayment Rate includes forbearance periods.



Date Disbursed

Type

In-School Rate

Repayment Rate

7/2006-6/2012

Stafford

6.80%

6.80%

PLUS

8.50%

8.50%

7/1998-6/2006

Stafford

6.62%

7.22%

PLUS

8.02%

8.02%

7/1995-6/1998

Stafford

7.42%

8.02%

PLUS

8.34%

8.34%

7/1994-6/1995

Stafford

8.02%

8.02%

PLUS

8.34%

8.34%

10/1992-6/1994

Stafford

8.02%

8.02%

PLUS

8.34%

8.34%

For use with Net Present Value calculations, the discount rate based on the most recent 10-year Treasury note is 4.61%.

The interest rates listed above are based on the following reference rates:

  • 91-day T-Bill rate of 4.92% (05-29-2007)
  • CMT rate of 5.24% (06-23-2006)
  • 10-year Treasury Note rate of 4.61% (05-08-2007 10-YEAR)

The interest rate formulas are as follows, where the 91-day T-bill rate is the investment yield of the 13-week Treasury Bill, not the discount rate:



Date Disbursed

Type

In-School Rate

Repayment Rate

Cap

7/1/2006-6/30/2012

Stafford

Fixed Rate of 6.8%

Fixed Rate of 6.8%

NA

PLUS

Fixed Rate of 8.5%

Fixed Rate of 8.5%

NA

7/1/1998-6/30/2006

Stafford

91-day T-bill + 1.7%

91-day T-bill + 2.3%

8.25%

PLUS

91-day T-bill + 3.1%

91-day T-bill + 3.1%

9.0%

7/1/1995-6/30/1998

Stafford

91-day T-bill + 2.5%

91-day T-bill + 3.1%

8.25%

PLUS

CMT + 3.1%

CMT + 3.1%

9.0%

7/1/1994-6/30/1995

Stafford

91-day T-bill + 3.1%

91-day T-bill + 3.1%

8.25%

PLUS

CMT + 3.1%

CMT + 3.1%

9.0%

10/1/1992-6/30/1994

Stafford

91-day T-bill + 3.1%

91-day T-bill + 3.1%

9.0%

PLUS

CMT + 3.1%

CMT + 3.1%

10.0%

As of 06-04-2007, the current projections for the 2007-2008 variable interest rates are:

  • Stafford Loan (In-School Rate Projection): 6.62%
  • Stafford Loan (Repayment Rate Projection): 7.22%
  • PLUS Loan (Rate Projection): 8.02%

Helpful Resources

http://www.finaid.org/loans/scripts/interest.cgi

http://www.treasurydirect.gov/instit/annceresult/query/query.htm

http://www.nchelp.org/elibrary/index.cfm?parent=82

www.nslds.ed.gov

http://www.salliemae.com/get_student_loan/apply_student_loan/interest_rates_fees/

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