Great Lakes

In Case You Missed It: New Interest Rates for Direct Loans

June 16, 2017

Part of our commitment to keeping you informed is calling your attention to changes in the industry. In case you missed it, ED recently released interest rates for Direct Loans first disbursed between July 1, 2017 and June 30, 2018. We have the details of the announcement you need to stay in the loop.

In the May 30, 2017 Electronic Announcement, ED provided details for interest rates on Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans that are first disbursed on or after July 1, 2013. Rates are set according to a formula based on a U.S. Department of the Treasury auction of 10-year Treasury notes. Separate interest rates are established each year for loans for which the first disbursement is made on or after July 1 through the following June 30 of the following year.

Direct Loan Interest Rates for 2017-2018

On Wednesday, May 10, 2017, the Treasury Department held a 10-year Treasury note auction that resulted in a high yield of 2.400%. The following table shows the interest rates for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed on or after July 1, 2017 and before July 1, 2018.

Loan Type Borrower Type Index Add-On Fixed Interest Rate
10-Year Treasury Note
Direct Subsidized Loans Undergraduate Students 2.400% 2.05% 4.45%
Direct Unsubsidized Loans Undergraduate Students 2.400% 2.05% 4.45%
Graduate/Professional Students 2.400% 3.60% 6.00%
Direct PLUS Loans Graduate/Professional Students and Parents of Dependent Undergraduate Students 2.400% 4.60% 7.00%

Interest Rates for Direct Consolidation Loans

The interest rate for Direct Consolidation Loans remains the weighted average of the interest rates on the loans included in the consolidation, rounded to the next higher one-eighth of one percent. There is no maximum interest rate for Direct Consolidation Loans.

We hope that this is helpful and appreciate all you do to assist your borrowers.

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