The May Treasury Note auction is done; one of its results is an increase in student loan interest rates for the coming school year. Direct student loans (subsidized and unsubsidized) disbursed between July 1, 2017 and June 30, 2018, will carry an interest rate of 4.45%, up from 3.76% in the current year. PLUS loan interest rates went up as well: graduate student PLUS loans will be at 6% and Parent PLUS loans will be at 7%.
The interest rate increase means a student taking out the maximum direct loan for next year will pay about $3.50 per month in additional interest on a 10-year payment plan after graduation on that loan. (A number of factors might make that higher or lower, including whether a portion of the loan was subsidized and whether any payments were made during the school years.)
Parents might be wondering if they can wring a few more dollars out of the system at this year’s 6.31% rate. The answer is probably not– and the headaches of doing so would likely cost more than the interest savings. But you might inquire with your school’s financial aid office just in case.
Here is a list of all interest rates for the coming year, as well as a link to loan fees.