Yesterday brought busting news for student loan borrowers: we now know what Federal Direct Loan interest rates will be for the 2014/15 school year! Though rates are usually officially set for the upcoming educational year based upon the 10-year Treasury Note rate in effect on June 1 st , the U. S. Treasury Department just held its last scheduled Treasury Note auction prior to that June 1 st deadline, giving us a put preview of next year’s rates. For loans disbursed between July 1, 2014 and June 30, 2015, interest rates will be as follows:
- Undergraduate Direct Loans: 4. 66% (up from 3. 86% in 2013/14)
- Graduate Unsubsidized Direct Loans: 6. 21% (up from 5. 41% in 2013/14)
- Direct PLUS Loans (for parents and graduate students): 7. 21% (up through 6. 41% in 2013/14)
Unfortunately for debtors, these rates represent a 0. 8% increase over last year’s rates. See last summer’s blog post regarding how federal education loan interest rates are usually set , and note that these types of new rates only apply to financial loans disbursed during the 2014/15 academic year. They do not affect loans borrowed by continuing college students in before years, nor student loans in pay back.
For borrowers presently repaying student loans, Senator Elizabeth Warren just introduced legislation known as the “ Bank on Students Crisis Loan Refinancing Act , ” which would allow borrowers of higher rate of interest student loans to refinance their financial debt at today’s lower interest rates. Check out our take on Warren’s offer and alternative student loan reform ideas , and contact us what you think about the latest student loan information using the comments section below.