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Interest Rates Fall Again on New Federal Student Loans for 2016/2017 #StudentLoans


Interest Rates Fall Again on New Federal Student Loans for 2016/2017

Every year, thousands of students and their parents take out federal student loans to help pay for college or graduate school. The interest rates on federal student loans are fixed for the life of the loan but reset each year on July 1 for new loans. Again this year, there’s good news for students and parents.

Rates on new federal student loans issued during the academic year July 1, 2016, through June 30, 2017 have decreased from 2015/2016 rates. Here are the details:

Old rate: 2015/2016

New rate: 2016/2017

Available to

Borrowing limits

Direct Loan:

undergraduate students



Undergraduate students only

Loans can be subsidized or unsubsidized; subsidized loans based on financial need as determined by federal aid application (FAFSA)

For dependent undergraduates:

1st year: $5,500 ($3,500 subsidized)

2nd year: $6,500 ($4,500 subsidized)

3rd, 4th, 5th year: $7,500 ($5,500 subsidized)

Max: $31,000 ($23,000 subsidized)

Direct Loan:

graduate students



Graduate/professional students only

Unsubsidized loans only

$20,500 per year (unsubsidized only); max $138,500 ($224,000 for health professionals)

Direct PLUS Loan



Graduate/professional students and parents of dependent undergraduate students

Unsubsidized loans only

Total cost of education, minus any other aid received by student or parent

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