Drop in Interest Rates on Federal Student Loans Good news for college students in the upcoming academic year as the interest rates on the latest federal student loans are falling this year. In fact, from the 1 st of July, 2016, the direct loans for undergraduates will have an interest rate of 3.76 per cent. However, this slashed rate will be applicable on the fact whether the direct loan is financial need based, i.e. “subsidized”, or not. This rate has lowered from 4.29 percent that was applicable until the 30 th of June, 2016. For graduate students, the direct loan rate has been lowered from 5.84 percent to 5.31 percent. Also, the Plus loan rate, made to undergraduate students’ parents, or even to the graduate students, has come down from 6.84 percent to 6.31 percent. Queries Related to Student Loans: Question- Can I opt for other fees to borrow federal student loan? Answer- Majority of the federal loans come with origination fees that depend on the loan type. The fee range can start from 1 percent and rise up to 4 percent, approximately, based on the amount of loan required.
Question- If I pay automatically, will there be a reduction in my student loan interest rate? Answer- Yes. For those of you who opt for automatic debit, there is a reduction of 0.25 percent on the interest rate.
With the interest rates reduced, now students can heave a sigh of relief when opting for their student loan. Professional guidance and proper knowledge will help you in repaying the student loan and also avail federal student loan forgiveness if you qualify for enrollment.