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Direct Loan Interest Rates Reduced!

August 20, 2013

The Direct Loan interest rates for 2013-14 are fixed as follows:

  • 3.86% for Direct Subsidized Loans and Direct Unsubsidized Loans for undergraduate students;
  • 5.41% for Direct Unsubsidized Loans for graduate/professional students; and
  • 6.41% for parent and graduate PLUS Loans.

 These interest rates are effective for all Direct Loans with a first disbursement on or after July 1, 2013. The interest rates are calculated using a base 10-year Treasury Note Index of 1.81% plus an add-on amount for each loan program--2.05% for Direct Subsidized Loans and Direct Unsubsidized Loans for undergraduate students, 3.60% for Direct Unsubsidized Loans for graduate/professional students, and 4.60% for parent and graduate PLUS.

 Under the new interest rate structure, all Direct Loans except Direct Consolidation Loans will be “variable-fixed,” meaning students would receive a new rate with each new loan, but then that rate would be fixed for the life of the loan. There are also interest rate caps at 8.25% for Direct Subsidized Loans and Direct Unsubsidized Loans for undergraduate students, 9.50% for Direct Unsubsidized Loans for graduate/professional students; and 10.50% for parent and graduate PLUS. For Direct Consolidation Loans, the interest rate remains the weighted average of the interest rates of the loans included in the consolidation, rounded up to the next higher one-eighth of one percent, without a cap.

Note:  CGCC does not participate in the Parent PLUS Direct Loan program.