Student Loan Interest Rates Drop
Federal Financial Aid Updates for 2009–2010
July 1, 2009 — Every July 1st, the federal government adjusts the interest rates and borrowing terms of federal student loans. In 2009, the borrower fee and the interest rate on selected loans dropped again. The maximum Pell Grant was increased to $5,350.
A new student loan repayment program, the Income-based Repayment Plan, has been launched. This program calculates your monthly payment from your total income rather than your total debt.
New Subsidized Stafford Loans: Interest Rate Cut
- The fixed interest rate on new Subsidized Stafford loans for undergraduates drops from 6.0% in 2008-2009 to 5.6% in 2009-2010.
- "New" is defined as a loan that first pays out between July 1, 2009 and June 30, 2010.
"A Borrower's Guide to July 1, 2009": Project on Student Debt
The Project on Student Debt provides a clear summary of the year's federal financial aid updates, along with a downloadable fact sheet of interest rates and fees.
Federal Student Loan Interest Rates
Finaid.org provides an interest rate table to which we've added the fixed rate reductions on new Subsidized Stafford loans for undergrads legislated in 2007.
| Date Loan Paid Out | Loan Type | In-School, Grace Period, or Deferment |
Repayment or Forbearance |
|---|---|---|---|
| July 1, 2009 to June 30, 2010 |
Subsidized Stafford for Undergrads | 5.60% | 5.60% |
| All other Stafford | 6.80% | 6.80% | |
| PLUS | Direct: 7.9%; FFEL: 8.50% | Direct: 7.9%; FFEL: 8.50% | |
| July 1, 2008 to June 30, 2009 |
Subsidized Stafford for Undergrads | 6.00% | 6.00% |
| All other Stafford | 6.80% | 6.80% | |
| PLUS | Direct: 7.9%; FFEL: 8.50% | Direct: 7.9%; FFEL: 8.50% | |
| July 1, 2006 to June 30, 2008 |
Stafford | 6.80% | 6.80% |
| PLUS | Direct: 7.9%; FFEL: 8.50% | Direct: 7.9%; FFEL: 8.50% | |
| July 1, 1998 to June 30, 2006 |
Stafford | 1.88% | 2.48% |
| PLUS | 3.28% | 3.28% | |
| July 1, 1995 to June 30, 1998 |
Stafford | 2.68% | 3.28% |
| PLUS | 3.58% | 3.58% | |
| July 1, 1994 to June 30, 1995 |
Stafford | 3.28% | 3.28% |
| PLUS | 3.58% | 3.58% | |
| October 1992 to June 30, 1994 |
Stafford | 3.28% | 3.28% |
| PLUS | 3.58% | 3.58% |
Lower Loan Fee for All New Stafford Loans
- The borrowing fee for all new Stafford loans is now 1.5% of the amount of the loan.
- "New" is defined as a loan that first pays out between July 1, 2009 and June 30, 2010.
- This fee cut applies to both subsidized and unsubsidized Stafford loans, for both undergraduate and graduate students.
Higher Stafford Loan Limit for Undergraduates
- The unsubsidized Stafford loan amount that undergraduates can borrow in any one year has been raised to $2,000.
- The total Stafford loan amount, subsidized and unsubsidized loans together, that undergraduates can borrow has been raised to $31,000 for students claimed as dependents on a parent or guardian's tax return. The total amount for independent students has been increased to $57,500.
Sources:
1) Student Aid on the Web, Federal Student Aid, U.S. Department of Education
2) Finaid.org
3) IBRinfo.org