Educational loans are available from a variety of sources, allowing students and/or parents to borrow funds that can pay some or all college costs.
While the “best” loans are federal loans based on financial need, and require the annual completion of the Free Application for Federal Student Aid (FAFSA) there are programs for virtually every family, regardless of income. Many loans do not require repayment while the student is enrolled.
Choose a loan from the list on the right.
Interest Rates, 2015–2016 Academic Year
Rates are annually set by Congress, and are to be known in early May, 2015.
Interest Rates, for the 2014–2015 Academic Year
The Direct Loan interest rates for 2014-15 are fixed as follows:
- 4.66% for Direct Subsidized Loans and Direct Unsubsidized Loans for undergraduate students;
- 6.21% for Direct Unsubsidized Loans for graduate/professional students; and
- 7.21% for parent and graduate PLUS Loans.
These rates are in effect for all Direct Loans with a first disbursement on or after July 1, 2014 and before July 1, 2015. The interest rates are calculated using a base 10-year Treasury Note Index of 2.61% plus an add-on amount for each loan program—2.05% for Direct Subsidized Loans and Direct Unsubsidized Loans for undergraduate students, 3.60% for Direct Unsubsidized Loans for graduate/professional students, and 4.60% for parent and graduate PLUS.
Under the new interest rate structure, all Direct Loans except Direct Consolidation Loans will be “variable-fixed,” meaning students would receive a new rate with each new loan, but then that rate would be fixed for the life of the loan. There are also interest rate caps at 8.25% for Direct Subsidized Loans and Direct Unsubsidized Loans for undergraduate students, 9.50% for Direct Unsubsidized Loans for graduate/professional students; and 10.50% for parent and graduate PLUS.
- Wise management of your loan will establish a strong credit history.
- Borrow only the funds you need. You are not required to borrow the full amount shown on your Award Letter. See How Much to Borrow?
- If you decide to limit borrowing, consider that - in most cases - the most appealing loan is the subsidized Stafford, followed by the unsubsidized Stafford, followed by the Federal PLUS, followed by a private (non-federal) loan.
- If you have to borrow an unsubsidized Stafford Loan, PLUS Loan or private (non-federal) loan, try to make at least interest payment while you are enrolled. What’s even better? Begin repaying principal and interest.
Keep copies of all loan documents in a single, well-marked folder. This will make them easy to find when questions arise.
- To help insure all payments are made on time, consider setting up an automatic debit from your checking or savings account.