what is the interest rate of subsidized stafford loan
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Stafford Loan As of July 1, 2006, all Stafford Loans are issued with a fixed interest rate. For direct loans and most loan providers, the rate is currently set at 6.80% for unsubsidized loans, with lower rates for subsidized loans for undergraduates, usually about 3.40%.
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Federal Student Loans for Undergraduate Students Interest Rates and Fees. The interest rates on Direct Subsidized Loans are fixed and do not change over the life of the loan. The interest rate for the 2016-2017 academic year is 3.76%. Every year on July 1, interest rates are reset based on current market rates.
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Direct Subsidized Stafford Loans: How to Apply Summary: Direct Subsidized Loans (sometimes called Subsidized Stafford Loans) are federal student loans borrowed through the Direct Loans program that offer undergraduate students a low, fixed interest rate and flexible repayment terms.
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Subsidized vs. Unsubsidized Stafford Loans Subsidized vs. Unsubsidized Stafford Loans. 1  You are allowed to defer any payments until after you graduate. 2  If you do not demonstrate financial need for the Subsidized Stafford/Direct Loan, you may still borrow the same amounts under the Unsubsidized Stafford/Direct Loan. 3  Offers a maximum of $23,000 to students upon graduation.
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Current Student Loan Interest Rates Federal Direct Student Loan. 2016–2017 Interest Rates. For Federal Direct Student Loans with a first disbursement date between July 1, 2016 and June 30, 2017, the following rates are fixed for the life of the loan: Direct Subsidized Loans and Direct Unsubsidized. Loans for Undergraduate Students 3.76%.
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Whatâs the Difference Between Subsidized and Unsubsidized Loans? Interest rates: According to the U.S. Department of Education, the current APR for undergraduate subsidized and unsubsidized loans (between July 2015 and July 2016) is 4.29%. The unsubsidized graduate degree loan interest rate is 5.84%.
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- *Direct Loan Fee: The Subsidized and Unsubsidized Federal Direct Stafford Loans have a 1.068% origination fee which will be deducted from the gross amount of the loan borrowed.
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- The school will specify the loan type for which the student qualifies. 1  Subsidized Stafford Loans are awarded on the basis of financial need. 2  The government pays the interest while the student is in school, in deferment (if applicable), and during the grace period before repayment begins.f you're a dependent undergraduate student, each year you can borrow up to: 1  $5,500 if you're a first-year student enrolled in a program of study that is at least a full academic year. 2  No more than $3,500 of this amount may be in subsidized loans.
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Difference Between Subsidized and Unsubsidized Stafford Loan The maximum amount that can be borrowed from a subsidized Stafford loan is lower than that of an unsubsidized Stafford loan: (Annual) Subsidized Stafford Loan Unsubsidized Stafford Loan. Freshman $ 3,500.00 up to $ 6,000.00. Sophomore $ 4,500.00 up to $ 6,000.00. Junior $ 5,500.00 up to $ 7,000.00.
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- This interest subsidy effectively gives the loan a zero percent interest rate during the in-school and other deferment periods. In contrast, the government does not pay the interest on unsubsidized Federal Stafford loans. (A comparison of subsidized and unsubsidized Federal Stafford Loans discusses other differences between subsidized and unsubsidized Federal Stafford loans.).
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Applying For Federal and Private Student Loans Stafford Loans are appealing for these reasons: 1  Low interest rates, currently around 3.4%. 2  No payments required while you are in school. 3  Not based on credit score.  Interest rate doesn’t 1  change. Funds can be applied to tuition and other college expenses.
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Looking for Student Loans Without Cosigners? Read This. The interest rates may vary based on when the loan is borrowed. There are two types of Stafford loans: 1  Subsidized Stafford loan-A loan for which the government pays the interest while you are in school, during grace periods, and during any deferment periods.
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Federal Direct Subsidized and Unsubsidized Loans Federal Direct Subsidized and Unsubsidized Loans. Federal Direct Subsidized and Unsubsidized Loans (formerly known as Stafford Loans) are available through the William D. Ford Federal Direct Loan Program to help pay for educational expenses. The Penn State Office of Student Aid awards Subsidized or Unsubsidized Loans, or a combination of both, based on financial need.
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Loan Interest Rates Federal Direct Loans 1 are student loans with their interest rate set by federal law and regulations. Student loans come in both subsidized and unsubsidized versions. Subsidized means that the government is subsidizing (paying) the interest while the student is enrolled and often when in a grace period 2.They are not interest-free loans but are not accumulating interest during defined periods.Unsubsidized loans are collecting interest from the point of disbursement.ubsidized means that the government is subsidizing (paying) the interest while the student is enrolled and often when in a grace period 2. They are not interest-free loans but are not accumulating interest during defined periods. Unsubsidized loans are collecting interest from the point of disbursement.
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- 1 Interest rates vary, but are currently 3.4%. 2  Loan limits move on a sliding scale, based on what year you are in college; ranging from $5,500 annually, for first year students to $7,500, for third year students and beyond. 3  Unsubsidized Stafford Loans do not require students to show a particular level of financial need.
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Federal Stafford Loans Remember that there are two kinds of Stafford Loans, there is the Subsidized Stafford Loan, which doesn’t require you to pay any interest while you are still in school, and there is the Unsubsidized Stafford Loan, which does accrue interest while you are still in school.
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Terms to Know Unsubsidized Federal Stafford Loans. Share this page. The unsubsidized Federal Stafford Loan is a federal student loan that is not based on financial need. Interest accrues on unsubsidized loans from the time the loan is disbursed by the school. If the borrower does not pay the interest as it accrues, it is capitalized (added to the loan balance). The interest is not paid by the federal government. This is the key difference between subsidized and unsubsidized student loans.
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Student loans in the United States 1 Summaries of each loan type appear below: • Subsidized Stafford (Stafford) Loans are low-interest, fixed rate loans for. undergraduates based on financial need. The Government pays the interest while. the student is in school or deferment. The Budget Control Act of 2011 eliminated.
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Student Loan Interest Rates Interest rates on Federal Stafford Loans are currently the same for the subsidized and unsubsidized versions. The interest rate on a federal consolidation loan is based on the interest rates of the federal education loans that are consolidated.Interest rates on private student loans may be based on the credit history of the borrower (and cosigner, if any) and can be either fixed or variable.tudent Loan Interest Deduction. Up to $2,500 total in interest on federal and private student loans may be deducted on the borrower’s federal income tax return each year. The deduction occurs as an above-the-line exclusion from income and so may be claimed even if the borrower doesn’t itemize deductions.
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Answers to Your Questions on Student Loan Interest Q: What is the current rate of federal subsidized loan? A: Absent further Congressional action, the interest rate for all Direct Subsidized Loans with a first disbursement date on or after July 1, 2013, is 6.8%. This is the same interest rate that applies to Direct Unsubsidized Loans.
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Stafford Student Loans Stafford loans are offered by the federal government. These loans are one of the most popular kinds of loans that are offered by the government. They are also one of the loans that have lowest rate of interest.
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What's the Difference Between Subsidized and Unsubsidized Student Loans? The benefits of unsubsidized Stafford loans include: No credit check is required. No collateral is needed. The interest rate, at 6.8 percent now, is usually lower than that on available private loans.
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- There is a loan fee on all Federal Direct Subsidized and Unsubsidized loans. The loan fee is a percentage of the loan amount and is deducted from each loan disbursement. Federal Direct Loans disbursed on or after 7/1/16 and before 7/1/17 have an interest rate of 3.76% compounded at a quarterly rate.
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Federal Perkins Loan The interest rate for the Federal Perkins Loan is stated in the borrowers promissory note. The annual interest rate for the Federal Perkins Loan is currently 5% a year. Interest does not accure while you are enrolled at least half-time.
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Maximum Allowable Loan Amounts for Federal Stafford Loans You may receive subsidized Stafford loans only up to 150% of the published length of your program. For example, students who are enrolled in program designed to take four years may receive subsidized Stafford loans for a period of six years (150 percent of 4 years = six years).
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Stafford loan Stafford loan. Definition. A need-based government loan made to students rather than their parents. The size of the Stafford loan is determined from the expected family contribution. Repayment is not required until after graduation. Unsubsidized Stafford loans accrue interest before graduation, but subsidized Stafford loans do not.