Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed on or after July 1, 2013 have fixed interest rates that are determined in accordance with formulas specified in sections 455(b)(8)(A) through (C) of the Higher Education Act of 1965, as amended (HEA).
The interest rate is determined annually for all loans first disbursed during any 12-month period beginning on July 1 and ending on June 30, and is equal to the high yield of the 10-year Treasury notes auctioned at the final auction held before June 1 of that 12-month period, plus a statutory add-on percentage that varies depending on the loan type and, for Direct Unsubsidized Loans, whether the loan was made to an undergraduate or graduate student. Loans first disbursed during different 12-month periods may have different interest rates, but the rate determined for any loan is a fixed interest rate for the life of the loan.
For each loan type, the calculated interest rate may not exceed a maximum rate specified in the HEA. The maximum interest rates are 8.25% for Direct Subsidized Loans and Direct Unsubsidized Loans made to undergraduate students, 9.50% for Direct Unsubsidized Loans made to graduate and professional students, and 10.50% for Direct PLUS Loans made to parents of dependent undergraduate students or to graduate or professional students.
Direct Loan Interest Rates for 2021-2022
On May 12, 2021, the Treasury Department held a 10-year Treasury note auction that resulted in a high yield of 1.684%. The chart below shows the interest rates for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed on or after July 1, 2021 and before July 1, 2022.
Interest Rates for Direct Subsidized Loans,
Direct Unsubsidized Loans, and Direct PLUS Loans
First disbursed on or after July 1, 2021 and before July 1, 2022
Loan Type |
10-Year Treasury
|
Add-On |
Fixed Interest
|
|
Direct Subsidized |
1.684% |
2.05% |
3.73% |
|
Direct |
1.684% |
3.60% |
5.28% |
|
Direct PLUS |
1.684% |
4.60% |
6.28% |
Note: In response to the COVID-19 emergency relief period, the interest rate on all Direct Loans has been temporarily set at 0% until at least September 30, 2021. Once the COVID-19 emergency relief period ends, the rates as described in this announcement will be in effect for loans first disbursed on or after July 1, 2021.
Thank you for your continued support of the Federal student assistance programs.