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Breaking News! 2019/20 Student Loan Interest Rates Just Announced!

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Shannon Vasconcelos

Written by Shannon Vasconceloson May 8th, 2019

I came to College Coach with close to 10 years of experience in college financial aid offices. I began my career at Boston University, where I counseled students and their parents on the financial aid process and reviewed undergraduate financial aid applications. At Tufts University, where I served as assistant director of financial aid, I developed expertise in the field of health professions financial aid. I was responsible for financial aid application review, grant awarding and loan processing, and college financing and debt management counseling for both pre- and post-doctoral dental students. I have also served as an active member of the Massachusetts Association of Student Financial Aid Administrator’s Early Awareness and Outreach Committee, coordinating early college awareness activities for middle school students; as a trainer for the Department of Education’s National Training for Counselors and Mentors, educating high school guidance counselors on the financial aid process; and as a volunteer for FAFSA Day Massachusetts, aiding students and parents with the completion of online financial aid applications.
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If you or your child plan to borrow federal student loans for the upcoming school year, we have some important news for you. We now know what student loan interest rates will be for the 2019/20 academic year. Interest rates for the Federal Direct Loan program are set each year based on the 10-Year Treasury Note rate as of June 1. The Treasury Department just held its last T-Note auction scheduled prior to that June 1 date, so rates are now locked in. Without further ado, interest rates for the 2019/20 school year will be:
  • Subsidized and Unsubsidized Direct Loans for undergraduate students: 4.529%
  • Unsubsidized Direct Loans for graduate students: 6.079%
  • Direct PLUS Loans for graduate student and parents of undergraduate students: 7.079%
These rates represent about a half a percent decrease in rates over loans borrowed for the 2018/19 academic year—the first decrease in federal student loan rates in three years! Given that federal undergraduate loans are capped at $5,500-$7,500/year (depending upon year in school), the rate decrease will cut the lifetime cost of a typical undergraduate loan by about $150. Graduate students and parent borrowers fully funding a year of schooling with federal student loans could save up to around $1,500 based upon this rate drop.  Falling rates are always good news for borrowers, but students and parents should always remember to maximize all scholarship/grant opportunities, college savings, and monthly payment plans before looking to borrow. The lower interest rates apply to new federal loans borrowed for academic periods beginning between July 1, 2019 and June 30, 2020. The rates are fixed for the life of these loans, and do not affect loans borrowed prior to or after the 2019/20 school year. the best way to pay for college


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