Interest Rates

Interest rates for direct Subsidized/Unsubsidized, FFEL Stafford, and PLUS loans are specific to the loan type and loan period. Information about interest rates for these loans is available at StudentAid.gov. The interest rate for each loan will be available from your loan servicer(s) and in the details for each loan record maintained in the National Student Loan Data System (NSLDS).

Perkins, nursing, and SPU institutional loans have a fixed interest rate of 5 percent.

Interest accrual and capitalization

Unsubsidized loans

  • At disbursement, interest begins to accrue on unsubsidized Direct, FFEL Stafford, PLUS, and alternative loans. You may choose to pay the interest as it accrues, or if you choose to let it accrue, it will be added to the principal balance of your loan when it enters repayment in a process called “capitalization.”
  • Capitalization increases the cost of your loan, as shown in this example:
    • Loan amount: $3,500
    • Interest rate: 6.8%
    • Estimated monthly interest: $19.83
    • Deferment period prior to repayment: 36 months
  • If you pay the $19.83 interest each month while in school, you will pay a total of $950 in interest over the life of your loan (length of repayment: 7.5 years).
  • If you do not pay any interest on the same loan while in school, you will pay a total of $1,486 in interest over the life of your loan (length of repayment: 9.6 years)
  • During periods of deferment, unsubsidized Direct, FEEL Stafford, and PLUS loans will accrue interest.

Subsidized loans

  • Subsidized Direct*, FFEL StaffordPerkins, Nursing, and SPU Institutional loans will not accrue interest during deferment periods. During periods of forbearance, unsubsidized and subsidized loans accrue interest.
  • You may pay the accruing interest during a period of deferment or forbearance; any accrued, unpaid interest at the end of a deferment or forbearance period may be capitalized.

*Direct subsidized loans with a first disbursement date between July 1, 2012, and before July 1, 2014, will begin to accrue at the beginning of the six-month grace period.

Alternative loans

  • Alternative loans may have a capitalization schedule that is more frequent. If you have an alternative loan, contact the lender for capitalization information.