Each year, the interest rates on federal education loans are set in mid-May after the 10-year Treasury note auction. Based on today’s auction, we know that interest rates for these loans will drop to a record low. This is good news amidst so much disappointment about what next year will look like for students going to college or graduate school.
Interest Rates for student loans, 2020-21 school year
Here are the three types of loans that are affected by these new rates:
Direct Undergraduate Loans (Subsidized and Unsubsidized)
Current rate – 4.53%
Estimated new rate – 2.75%
Direct Graduate Student Loans (Unsubsidized)
Current rate – 6.08%
Estimated new rate – 4.3%
Parent PLUS Loans and Grad PLUS Loans
Current rate – 7.08%
Estimated new rate – 5.3%
