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Federal Direct Student Loan Interest Rates

Per legislation signed into law by President Obama in August 2013, interest rates for Federal Direct loans will now be calculated on a year-by-year basis based using the following formula: The current 10-Year Treasury Note index rate will be used, in combination with an add-on amount determined by Congress. Each loan will have a rate cap should the the Treasury Note index increase in subsequent years.

The below chart highlights the finalized rates for the 2013-2014 academic year:

Federal Direct Student Loan 2013-2014 Interest Rates
Loan Type Student Grade Level 10-Year Treasury Note Index Rate Add-On 2013-2014 Fixed Interest Rate
Direct Subsidized Loans Undergraduate Students 1.81% 2.05% 3.86%
Direct Unsubsidized Loans Undergraduate Students 1.81% 2.05% 3.86%
Direct Unsubsidized Loans Graduate Students 1.81% 3.60% 5.41%
Direct PLUS Loans Parents of Undergraduate Dependent Students and Graduate/Professional Students 1.81% 4.60% 6.41%

The interest rate caps for each loans are listed in the below chart:

Federal Direct Student Loan Interest Rate Caps
Loan Type Student Grade Level Interest Rate Caps
Direct Subsidized Loans Undergraduate Students 8.25%
Direct Unsubsidized Loans Undergraduate Students 8.25%
Direct Unsubsidized Loans Graduate Students 9.50%
Direct PLUS Loans Parents of Undergraduate Dependent Students and Graduate/Professional Students 10.50%