New Student Loan Rates: 3.9% For Students, 6.4% For Parents

Finally, the Senate passed a bill today on new federal student loan rates for college that is headed to President Obama’s desk to be signed. The House already approved the new rates for federal loans that will allow undergraduates to borrow at a 3.9 percent interest rate for subsidized and unsubsidized loans. Graduate students will be able to borrow at 5.4 percent, and parents can borrow at 6.4 percent, at least for this year.

These rates will be locked in for this academic year’s loans, but under the bill interest rates are tied to the rate of the ten-year Treasury note, so as loan rates reset each July, the cost of borrowing for college could rise each year if the rate on the ten-year Treasury note rises.