Stafford Student Loan Interest Rates for Loans Disbursed July 1, 2012 - June 30, 2013
The interest rate for Federal Direct Stafford Loans disbursed on or after July 1, 2012 and before July 1, 2013 will be 6.8%, EXCEPT Federal Direct Subsidized Stafford Loans for undergraduate students, the interest of which will be 3.4%, as per legislation signed into law at the end of June 2012.
Student Loan Terms Changing for 2012-2013
Acts of Congress have changed terms for student loans in four major ways beginning in 2012-2013.
1. Graduate level students will no longer be eligible for Federal Subsidized Stafford Loans for periods of enrollment beginning on or after July 1, 2012. (Budget Control Act)
2. Federal Stafford and PLUS Loan fees remain 1% and 4%, respectively, but rebates will no longer be available for loans first disbursed on or after July 1, 2012. (Budget Control Act)
3. The interest rate for all Federal Stafford Loans is set to 6.8% effective for loans disbursed on or after July 1, 2012: undergraduate subsidized loans will no longer be set at the lower rates. (College Cost Reduction and Access Act)
4. Federal Subsidized Stafford Loans will no longer be subsidized during the grace period, which is the six months following graduation or otherwise stopping at least half-time enrollment, for loans disbursed on or after July 1, 2012. (Consolidated Appropriations Act, 2012)
Posted Spring 2010
Student Loan Terms Changing for 2010-2011
On March 30, 2010, President Obama signed a bill that changes the processing of federal loans and grants for students by eliminating the Federal Family Education Loan Program (FFELP) on July 1, 2010, utilizing the Federal Direct Loan Program exclusively, and using the estimated savings to increase funding for Federal Pell Grants.
The Federal Direct Loan Program provides federally insured loans to students and their families, but rather than working with private lenders who process and disburse federal loans as participants in the Federal Family Education Loan Program (FFELP), students and their families will now receive federal loans without the intervention of a private lender. This change will not affect borrowers' future federal loan eligibility, but the process to obtain the federal educational loans will be different.
Students and parents who have existing loans through FFELP will continue to work with private lenders for these existing loans. Note: In some cases, private lenders may sell their FFELP loans to the U.S. Department of Education (DOE), but these loans are not considered Federal Direct Loans (they are called "PUT" loans, meaning that the FFELP loans have been "put" or "placed" with DOE). Borrowers may elect to consolidate their existing FFELP loans into one Federal Direct Consolidation Loan to allow for a single repayment with the U.S. Department of Education.
This page was last modified on July 9, 2012.
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