Interest Rates on U.S. Title IV DIRECT LOANS

Information on repayment calculators can be found here.

Direct Subsidised Stafford Loan
This loan is based on financial need as defined by the U.S. Department of Education. The loan is subsidised, meaning the U.S. government pays the interest while you are studying at least half-time at an eligible institution. The U.S. government also pays the interest during the six-month grace period after you leave the institution or drop below half-time enrolment and during any authorised period of deferment. For undergraduate students only, subsidised Stafford loans disbursed on or after 1 July, 2011 and before July 1, 2012 have a fixed interest rate of 3.4%. For graduate and professional students the fixed interest rate is 6.8%.

Direct Unsubsidised Stafford Loan
This loan is not based on financial need. Student borrowers are responsible for paying the interest from the time the money is disbursed. The interest may be paid as it comes due, or it may be postponed and allowed to accumulate while you are enrolled at least half-time at an eligible institution, for the six-month grace period after you leave university or drop below half-time enrolment, and during any authorised period of deferment. The interest accrues on postponed payments and is capitalised (added to your principal loan balance). If you choose postponing payments, you will not make any payments while you are in university. However, this option adds to the amount you will have to repay on your loan when you leave university. It may also increase your monthly payment when you enter repayment.

For all Stafford unsubsidised loans disbursed on or after July 1, 2006 the interest rate is fixed at 6.8%. This was a change from a variable to a fixed rate, and does not affect a borrower's variable interest rate on loans made before July 1, 2006.

Direct Parent PLUS Loan
This loan is not based on financial need. Parents may be eligible for this loan if their child is a dependent undergraduate student as defined by the U.S. Department of Education. Parents may use this loan to pay the entire cost of attendance minus any other financial aid (including grants and scholarships) received by or for the dependent undergraduate student. A credit check will be completed before approval of the loan has been made. Repayment begins 60 days after the final loan disbursement; or, for loans disbursed on or after July 1, 2009, and upon request, six months after the dependent for whom the loan was borrowed leaves the university or drops below half-time enrolment status.

For Direct PLUS loans disbursed on or after July 1, 2009 the interest rate is fixed at 7.9%. This change from a variable to a fixed rate does not affect a borrower's variable interest rate on loans made before July 1, 2006.

Direct Graduate PLUS Loan
Graduate/professional students may borrow this loan on their own behalf, to cover the difference between cost of attendance and all other awarded aid, and should be accessed only after applying for Stafford loans. This loan has a federal credit check process. The review looks for adverse credit only; you do not have to meet the other financial standards which generally apply on private/ alternative loans. Repayment begins 60 days after the final loan disbursement, or for loans disbursed on or after July 1 2009, upon request, six months after the student borrower leaves the university or drops below half-time enrolment status.

For Direct PLUS loans disbursed on or after July 1, 2009 the interest rate is fixed at 7.9%.

Other U.S. Federal Loan Information
A number of other programs including Pell Grants, Perkins Loans, etc are available under the same U.S. legislation of Title IV Loans. However, these cannot be awarded to students pursuing degrees at institutions outside the United States. Eligible students may, however, defer the repayment of these loans whilst attending the University of Bath.

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