Recent legislative changes have altered certain aspects of federal student loans. As regulations change, the Office of Financial Aid updates all materials and makes every effort to disseminate that information to our students and their families. Please see the most recent changes below.
Origination Fees
On August 2, 2011, Congress passed the Budget Control Act (BCA) of 2011, which put into place an automatic process of “across-the-board” Federal budget cuts, known as the sequester, to take effect if Congress failed to enact legislation by March 1, 2013 to reduce the Federal deficit. The March 1st deadline passed and Congress failed to enact legislation. Therefore, sequestration has been implemented. As a result, Direct Loan origination fees will increase at the beginning of the Federal fiscal year until sequestration is repealed.
The origination fees are as follows for loans first disbursed between:
- October 1, 2023 through September 30, 2024
- 1.057% on all Subsidized and Unsubsidized Direct Loans
- 4.228% on all Parent PLUS Direct Loans
- October 1, 2022 through September 30, 2023
- 1.057% on all Subsidized and Unsubsidized Direct Loans
- 4.228% on all Parent PLUS Direct Loans
- October 1, 2021 through September 30, 2022
- 1.057% on all Subsidized and Unsubsidized Direct Loans
- 4.228% on all Parent PLUS Direct Loans
Subsidized Direct Loan Eligibility Limited to 150% of Academic Program
Effective for new Direct Loans for which the first disbursement is made on or after July 1, 2013, Subsidized Direct Loan eligibility is limited to a maximum of 150% of the student’s current academic program length.
- Borrowers may receive Subsidized Direct Loans for no more than 150% of the length of the current academic program (ex: 6 years for a 4 year degree)
- Once a borrower has received Subsidized Direct Loans for 150% of the length of their program, the borrower’s future Subsidized Loan eligibility will end.
- A student who has received Subsidized Direct Loans for 150% of the length of their program and continues enrollment beyond that point will lose all subsidies on previously received Subsidized Direct Loans and would be required to pay all accumulated interest.
- This policy is in addition to, and not in place of, the lifetime aggregate loan limits currently in place.
The College Cost Reduction and Access Act (CCRAA), (Public Law 110-84), was signed into law on August 9, 2013. This amended the Higher Education Act, section 455(b), to provide new formulas for determining interest rates on all Federal Direct Loans. The law ties the fixed interest rates to the sum of the high yield of the 10-year Treasury note plus an additional percentage, with a set cap on the maximum rate that can be assessed for an award year.
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Interest Rate Changes on Federal Student Loans The College Cost Reduction and Access Act (CCRAA), (Public Law 110-84), was signed into law on August 9, 2013. This amended the Higher Education Act, section 455(b), to provide new formulas for determining interest rates on all Federal Direct Loans. The law ties the fixed interest rates to the sum of the high yield of the 10-year Treasury note plus an additional percentage, with a set cap on the maximum rate that can be assessed for an award year. |
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Loan Type |
Interest Rate Formula |
Interest Rates for 2024-2025 (fixed over life of loan) |
Interest Rates for 2023-2024 (fixed over life of loan) |
Interest Rates for 2022-2023 (fixed over life of loan) |
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Subsidized/Unsubsidized Direct Loans for Undergraduate Students |
T + 2.05% |
6.53% |
5.50% |
4.99% |
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Parent PLUS Direct Loans |
T + 4.60% |
9.08% |
8.05% |
7.54% |
*T = the 10-year Treasury note rate:
- 4.483% as of July 1, 2024
- 3.448% as of July 1, 2023
- 2.943% as of July 1, 2022
Each year, the interest rates will be determined by the 10-year Treasury note rate as of the preceding June 1st and the rates will be locked for that following year. A loan disbursed within a particular year will carry that rate for the lifetime of the loan.