The interest rates on federal student loans will decrease by 0.37% for new loans first disbursed on or after July 1, 2015.
Each year’s loans have a new fixed rate based on the last 10-year Treasury Note auction in May. The interest rates on federal loans for the 2015-2016 academic year will be based on the auction held on May 13, 2015. The auction yield, which is 2.24%, is down 0.37% from the 2.61% yield from the May 7, 2014 auction.
The interest rate on Direct Subsidized and Unsubsidized Loans to undergraduate students will decrease from 4.66% to 4.29%. The interest rate on Direct Unsubsidized Loans to graduate students will decrease from 6.21% to 5.84%. The interest rate on Parent PLUS Loans and Grad PLUS Loans will decrease from 7.21% to 6.84%.
The interest rate on Perkins Loans remains unchanged at 5.0% fixed.
The interest rate cuts will save borrowers about $250 per $10,000 in new loans, assuming a 10-year repayment term, and about $500 in interest on a 20-year term. Loan payments will decrease by about $2 a month or $25 per year per $10,000 in student loans at the new interest rates.
The fees on new federal education loans will also be decreasing. The fees on Direct Subsidized and Unsubsidized Loans will decrease from 1.073% to 1.068% and the fees on PLUS Loans will decrease from 4.292% to 4.272%, effective with loans first disbursed on or after October 1, 2015.
These interest rates apply only to new loans. Borrowers with old loans cannot refinance their loans to get the new, lower interest rates.
| Loan Program | Borrowers | 2014-2015 Interest Rate | 2015-2016 Interest Rate |
|---|---|---|---|
| Direct Subsidized and Unsubsidized Loans | Undergraduate Students | 4.66% Fixed | 4.29% Fixed |
| Graduate Students (Unsubsidized Only) | 6.21% Fixed | 5.84% Fixed | |
| Federal PLUS Loan | Parents of Undergraduate Students | 7.21% Fixed | 6.84% Fixed |
| Graduate Students | 7.21% Fixed | 6.84% Fixed |