With 2017-2018 Federal Direct Student Loan interest rates set to take effect on July 1, 2017, now is the time for educational institutions to update all Truth in Lending disclosure forms (Federal Reserve Board model forms H-18 to H-23). Additionally, schools should make sure to use the current Private Education Loan Applicant Self-Certification form issued by the U.S. Department of Education (OMB No. 1845-0101 with an expiration date of July 31, 2019).
Congress sets interest rates on direct loans from the U.S. Department of Education through legislation that ties the rate to financial markets. Schools and student loan servicers do not set student loan interest rates and cannot change them. For Federal Direct Student Loans with a first disbursement date between July 1, 2017 and June 30, 2018, the following rates are fixed for the life of the loan:
Direct Subsidized Loans and Direct Unsubsidized Loans for Undergraduate Students: 4.45%
Direct Unsubsidized Loans for Graduate and Professional Students: 6%
Direct PLUS Loans for Parents of Undergraduate Students and Direct PLUS Loans for Graduate/Professional Students: 7%
Historical Interest Rates for Previous Academic Years
| First Disbursement Date | Direct Subsidized and Unsubsidized Rate for Undergraduates | Direct Unsubsidized Rate for Graduate Students | Direct Grad PLUS and Parent PLUS Rate |
|---|---|---|---|
| July 1, 2016 - June 30, 2017 | 3.76% | 5.31% | 6.31% |
| July 1, 2015 - June 30, 2016 | 4.29% | 5.84% | 6.84% |
| July 1, 2014 - June 30, 2015 | 4.66% | 6.21% | 7.21% |
| July 1, 2013 - June 30, 2014 | 3.86% | 5.41% | 6.41% |
For More Information
If you have any questions about this Alert, please contact Mark D. Belongia, any of the attorneys in the Higher Education Practice Group or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.