Good news for students who anticipate using federal Stafford loans this fall as part of their financial aid package. On July 1, the interest rate for new subsidized Stafford loans for undergraduate students will drop to 5.6% from the current rate of 6%. This rate, which applies to loans issued between July 1 and June 30, 2010, will remain in effect for the life of the loan. Subsidized Stafford loans are available for borrowers who demonstrate financial need.
Rates for new unsubsidized Stafford loans, which are available for all students, will remain at 6.8%. However, all Stafford borrowers will get a break on upfront borrower fees beginning on July 1, when the maximum fee that lenders will be permitted to charge on Stafford loans will drop to 1.5% from 2%.
Stafford loans are fixed-rate federal student loans for undergraduate and graduate students attending college at least half-time. For more information on Stafford loans or repayment options, visit studentaid.ed.gov.
