Student loans have become more and more expensive in the past few years.
The Federal government has determined the Federal Direct Student Loan interest rates for the school year 2024-25, and they will be higher.
This will be for new federal loans disbursed between July 1, 2024, and June 30, 2025. The net increase is 1.3% higher than last year’s rate.
Families and students considering using Federal Direct Loans for the 2024-25 school year will be charged the interest rates below. Borrowers need to understand how these rates are calculated and the impact of long-term student debt.
The federal student loan interest rates change each year on July 1 and the rate on a student loan is fixed for the life of the loan.
This student loan interest rate impacts direct subsidized, direct unsubsidized, direct graduate, and direct plus loans. If the federal loans are consolidated, then the new federal consolidated loan will have a new interest rate.
To learn more about all types of loans available, please read our comprehensive article on Student Loans
One of the unknown expenses on the loans is that in addition to the interest rate, processing fees are associated with these loans, which change depending on the type of loan the student or parent is using. Please note the PLUS (Parent) loan rate fees – 4.228 % ?????????? Then you end up paying interest on this too!
Here are the latest rates for new loans.
Some families may benefit by using a private student loan. The most significant advantage of using a private student loan is that it does not have a federal loan fee. It does require standard loan underwriting, which could impact your ability to borrow and the final interest rate.
If the parents are applying for these loans, then they are responsible for the repayment.
If you would like to discuss how you can make wise decisions for Retirement Planning and College Planning for your family, please don’t hesitate to contact Dave Coen to set up a no-cost consultation.
You can see more about my role as a Financial Advisor with SageView Advisory HERE
Tel:714-813-1703
dcoen@sageviewadvisory / davec@collegeplanningamerica.com
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