Federal Student Loan Interest Rates for 2019-2020

Federal Student Loan Interest Rates for 2019-2020

If you’re thinking about taking out a federal student loan to help pay for college, you’re likely wondering what the federal student loan interest rates are for 2020. The interest rate on a student loan can have a big impact on the total amount you’ll pay over the life of the loan, so it’s important to understand how interest factors in. Keep reading to see what the current interest rates on federal student loans are for the 2019-2020 school year, and what they mean for you.

Interest rates vary depending on the type of federal student loan, and when the loan was first disbursed. The interest rates for loans disbursed between July 1, 2019, and July 1, 2020 have interest rates as shown below.

  • Direct Subsidized Loans (Undergraduate): 4.53%

Direct Subsidized Loans are federal student loans made available to eligible undergraduate students who demonstrate financial need. With these loans, the federal government pays your interest on the loan while you are enrolled in school at least half-time, for the first six months after you graduate college (a “grace period”), and during any eligible periods of deferment.

  • Direct Unsubsidized Loans (Undergraduate): 4.53%
  • Direct Unsubsidized Loans (Graduate or Professional): 6.08%

Direct Unsubsidized Loans are a type of federal student loan available to undergraduate and graduate students. You do not need to demonstrate financial need to be eligible for a Direct Unsubsidized Loan. With this type of loan, the borrower is responsible for paying the interest on the loan from the day it is disbursed, even while you are in school.

  • Direct PLUS Loans (Parents or Graduate or Professional Students): 7.08%

Direct PLUS Loans are available to parents, graduate, and professional students through schools that are part of the Direct Loan Program. These types of loans can also be called a “Parent PLUS” loan when it is borrowed by a parent, or a “Grad PLUS” loan when it is borrowed by a graduate or professional student. Financial need is not a factor, but a credit check will be conducted to assess eligibility.

All of the interest rates listed above are fixed rates. This means that the interest rate you are given when the loan is first disbursed will remain the same for the life of the loan.