Interest rates for Direct Subsidized or Unsubsidized Loans vary depending on loan type, when the loan was first disbursed, and your degree status (undergraduate or graduate).
| Period loans first disbursed | Direct Subsidized | Direct Unsubsidized |
| Undergraduate | Graduate | Undergraduate | Graduate |
| 7/1/23 - 6/30/24 | 5.5 percent | Not applicable | 5.5 percent | 7.05 percent |
| 7/1/22 - 6/30/23 | 4.99 percent | Not applicable | 4.99 percent | 6.54 percent |
| 7/1/21 - 6/30/22 | 3.73 percent | Not applicable | 3.73 percent | 5.28 percent |
| 7/1/20 - 6/30/21 | 2.75 percent | Not applicable | 2.75 percent | 4.3 percent |
| 7/1/19 - 6/30/20 | 4.53 percent | Not applicable | 4.53 percent | 6.08 percent |
| 7/1/18 - 6/30/19 | 5.05 percent | Not applicable | 5.05 percent | 6.60 percent |
| 7/1/17 - 6/30/18 | 4.45 percent | Not applicable | 4.45 percent | 6 percent |
| 7/1/16 - 6/30/17 | 3.76 percent | Not applicable | 3.76 percent | 5.31 percent |
| 7/1/15 - 6/30/16 | 4.29 percent | Not applicable | 4.29 percent | 5.84 percent |
| 7/1/14 - 6/30/15 | 4.66 percent | Not applicable | 4.66 percent | 6.21 percent |
| 7/1/13 - 6/30/14 | 3.86 percent | Not applicable | 3.86 percent | 5.41 percent |
| 7/1/12 - 6/30/13 | 3.4 percent | Not applicable | 6.8 percent |
| 7/1/11 - 6/30/12 | 3.4 percent | 6.8 percent | 6.8 percent |
| 7/1/10 - 6/30/11 | 4.5 percent | 6.8 percent | 6.8 percent |
| 7/1/09 - 6/30/10 | 5.6 percent | 6.8 percent | 6.8 percent |
| 7/1/08 - 6/30/09 | 6 percent | 6.8 percent | 6.8 percent |
| 7/1/06 - 6/30/08 | 6.8 percent | 6.8 percent | 6.8 percent |
| Prior to 6/30/06 | Contact your loan holder to determine the interest rate |
Military service members may be eligible for reduced interest rates.
If you need more information about the interest rate(s) for your student loans, contact your loan holder. If you aren't sure which institution or servicer holds your loans, locate your loan holder.
For more interest rate information:
FAQs
What is the current interest rate for Direct Subsidized and Unsubsidized Loans? If you got your loan after July 1, 2023, and before July 1, 2024: For undergraduate students, the interest rate for Direct Subsidized Loans and Direct Unsubsidized Loans is 5.50%.
Do subsidized or unsubsidized loans have higher interest rates? ›
Which is better: Subsidized or unsubsidized loans? Subsidized loans are the best first choice for borrowers; since the federal government covers the interest that accrues on your loans, it's less money for you to pay out of pocket.
Is direct subsidized loan better than unsubsidized? ›
Differences Between Direct Subsidized Loans and Direct Unsubsidized Loans. In short, Direct Subsidized Loans have slightly better terms to help out students with financial need.
How much is a direct subsidized loan? ›
Annual and Lifetime Loan Maximums
| Dependent Undergraduate Student |
|---|
| First-Year (0 – 29 credits) | $5,500 A maximum of $3,500 may be subsidized |
| Second-Year (29.1 – 59 credits) | $6,500 A maximum of $4,500 may be subsidized |
| Third-, Fourth-, and Fifth-Years (59.1+ credits) | $7,500 A maximum of $5,500 may be subsidized |
1 more rowBoth subsidized and unsubsidized loans are distributed as part of the federal direct loan program. However, if you meet the financial need requirements to qualify for subsidized loans, you'll pay less over time than you would with unsubsidized loans.
Is it better to pay off unsubsidized or subsidized loans first? ›
Which Student Loans Should You Pay First: Subsidized or Unsubsidized? It's a good idea to start paying back unsubsidized student loans first, since you're more likely to have a higher balance that accrues interest much faster.
Who is eligible for unsubsidized direct loans? ›
Direct Unsubsidized Loans are available to undergraduate, graduate, or professional degree students enrolled at least half-time at a school that participates in the Direct Loan Program. Financial need is not required to qualify.
Do you pay back unsubsidized loans? ›
Unlike a subsidized loan, you are responsible for the interest from the time the unsubsidized loan is disbursed until it's paid in full. You can choose to pay the interest or allow it to accrue (accumulate) and be capitalized (that is, added to the principal amount of your loan).
At what point are you no longer eligible to receive direct subsidized loans? ›
You are no longer eligible to receive direct subsidized loans once you exceed the maximum eligibility period for these loans, which is typically 150% of the published length of your educational program.
How much student loan can I get per semester? ›
Direct Loan limits for independent students
| Year in school | Annual borrowing limit, Subsidized Loans* | Annual borrowing limit, Unsubsidized Loans* |
|---|
| 1st-year undergrad | $3,500 | $9,500** |
| 2nd-year undergrad | $4,500 | $10,500** |
| 3rd- & 4th-year undergrad | $5,500 | $12,500** |
| Limits for all years | $23,000 | $57,500** |
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If you qualify for a subsidized loan, the government pays your loan interest while you're in school at least half-time and continues to pay it during a six-month grace period after you leave school. The government will also pay your loan during a period of deferment.
What is the maximum unsubsidized loan per semester? ›
The maximum amount you can borrow each academic year in Direct Unsubsidized Loans ranges from $5,500 to $12,500 for undergraduates, depending on your year in school and your dependency status. Direct Unsubsidized Loans have an annual limit of $20,500 for graduate or professional students.
What are the benefits of a direct subsidized loan? ›
Direct Subsidized Loans: You won't be charged interest while you're enrolled in school or during your six-month grace period. Direct Unsubsidized Loans: Interest starts accumulating from the date of your first loan disbursem*nt (when you receive the funds from your school).
What are disadvantages of a unsubsidized loan? ›
Pros and cons of unsubsidized loans
- Pro: Accessible to more students. Because it is not necessary to demonstrate financial need, unsubsidized loans are open to more borrowers.
- Pro: Larger borrowing amounts available. ...
- Con: Interest begins accruing immediately. ...
- Con: Higher interest rates than unsubsidized loans.
Interest Rates for Direct Loans First Disbursed on or After July 1, 2023, and Before July 1, 2024
| Loan Type | Borrower Type | Fixed Interest Rate |
|---|
| Direct Unsubsidized Loans | Graduate or Professional | 7.05% |
| Direct PLUS Loans | Parents and Graduate or Professional Students | 8.05% |
1 more rowThat said, if you do decide to take on federal loans, it's generally wise to accept subsidized loans first because they offer more benefits in the form of government interest payments. Unsubsidized loans, on the other hand, put you on the hook for all of the interest that accrues on the loan.
Do you pay back subsidized loans? ›
Once you graduate, drop below half-time enrollment, or leave school, your federal student loan goes into repayment. However, if you have a Direct Subsidized, Direct Unsubsidized, or Federal Family Education Loan, you have a six-month grace period before you are required to start making regular payments.
What is a subsidized interest rate? ›
Grantees may provide an interest rate subsidy to make the payments more affordable. For example, a bank may provide a couple with a home loan with a five percent interest rate. The grantee may subsidize it so that the interest rate changes from five percent to three percent, thereby lowering the mortgage payment.
Can you borrow more with unsubsidized loans? ›
Pros of Unsubsidized Loans
The amount you can borrow isn't based on financial need. Students are able to borrow more money than subsidized loans. The total aggregate loan amount is limited to $31,000 for undergraduate students considered dependents and whose parents don't qualify for direct PLUS loans.
Would a private student loan typically have a higher or lower interest rate than a federal student loan? ›
Federal loans generally have more favorable terms, including flexible repayment options. Students with "exceptional financial need" may qualify for subsidized federal loans, while unsubsidized loans are available regardless of financial need. The interest is usually lower on federal loans compared to private loans.
