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Federal Student Aid, Department of Education.
Notice.
The Chief Operating Officer for Federal Student Aid announces the interest rates for Federal Direct Stafford/Ford Loans (Direct Subsidized Loans), Federal Direct Unsubsidized Stafford/Ford Loans (Direct Unsubsidized Loans), and Federal Direct PLUS Loans (Direct PLUS Loans) made under the William D. Ford Federal Direct Loan (Direct Loan) Program, Assistance Listing Number 84.268, with first disbursement dates on or after July 1, 2021, and before July 1, 2022.
Travis Sturlaugson, U.S. Department of Education, 830 First Street NE, 11th Floor, Washington, DC 20202. Telephone: (202) 377-4174 or by email: travis.sturlaugson@ed.gov.
If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll free, at 1-800-877-8339.
Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans (collectively referred to as “Direct Loans”) may have either fixed or variable interest rates, depending on when the loan was first disbursed or, in the case of a Direct Consolidation Loan, when the application for the loan was received. Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed on or after July 1, 2006, and Direct Consolidation Loans for which the application was received on or after February 1, 1999, have fixed interest rates that apply for the life of the loan. Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed before July 1, 2006, and Direct Consolidation Loans for which the application was received before February 1, 1999, have variable interest rates that are determined annually and are in effect during the period from July 1 of one year through June 30 of the following year.
This notice announces the fixed interest rates for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans with first disbursement dates on or after July 1, 2021, and before July 1, 2022, and provides interest rate information for other fixed-rate Direct Loans. Interest rate information for variable-rate Direct Loans is announced in a separate Federal Register notice.
Section 455(b) of the Higher Education Act of 1965, as amended (HEA) (20 U.S.C. 1087e(b)) includes formulas for determining the interest rates for all Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed on or after July 1, 2013. The interest rate for these loans is a fixed rate that is determined annually for all loans first disbursed during any 12-month period beginning on July 1 and ending on June 30. The rate is equal to the high yield of the 10-year Treasury notes auctioned at the final auction held before June 1 of that 12-month period, plus a statutory add-on percentage that varies depending on the loan type and, for Direct Unsubsidized Loans, whether the loan was made to an undergraduate or graduate student. The calculated interest rate may not exceed a maximum rate specified in the HEA. If the interest rate formula results in a rate that exceeds the statutory maximum rate, the rate is the statutory maximum rate. Loans first disbursed during different 12-month periods that begin on July 1 and end on June 30 may have different interest rates, but the rate determined for any loan is a fixed interest rate for the life of the loan.
On May 12, 2021, the United States Treasury Department held a 10-year Treasury note auction that resulted in a high yield of 1.684 percent.
Chart 1 shows the fixed interest rates for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed on or after July 1, 2021, and before July 1, 2022.
| Loan type | Borrower type | 10-year treasury note high yield 05/12/2021 (%) | Add-on (%) | Maximum rate (%) | Fixed interest rate (%) |
|---|---|---|---|---|---|
| Direct Subsidized Loans | Undergraduate students | 1.684 | 2.05 | 8.25 | 3.73 |
| Direct Unsubsidized Loans | |||||
| Direct Unsubsidized Loans1 | Graduate and professional students | 1.684 | 3.60 | 9.50 | 5.28 |
| Direct PLUS Loans | Parents of dependent undergraduate students | 1.684 | 4.60 | 10.50 | 6.28 |
| Graduate and professional students | |||||
| 1 Graduate and professional students are not eligible to receive Direct Subsidized Loans. | |||||
For reference, Chart 2 compares the fixed interest rates for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed during the period July 1, 2021, through June 30, 2022, with the fixed interest ( print page 44004) rates for loans first disbursed during each previous 12-month period from July 1, 2013, through June 30, 2021.
| First disbursed | Fixed interest rates (%) | Federal Register Notice | |||
|---|---|---|---|---|---|
| On/after | Before | Direct subsidized loans Direct Unsubsidized loans (undergraduate students) | Direct unsubsidized loans (graduate or professional students) | Direct PLUS loans | |
| 07/01/2021 | 07/01/2022 | 3.73 | 5.28 | 6.28 | N/A |
| 07/01/2020 | 07/01/2021 | 2.75 | 4.30 | 5.30 | 85 FR 48229 (August 10, 2020). |
| 07/01/2019 | 07/01/2020 | 4.53 | 6.08 | 7.08 | 85 FR 2417 (January 15, 2020). |
| 07/01/2018 | 07/01/2019 | 5.05 | 6.60 | 7.60 | 83 FR 53864 (October 25, 2018). |
| 07/01/2017 | 07/01/2018 | 4.45 | 6.00 | 7.00 | 82 FR 29062 (June 27, 2017). |
| 07/01/2016 | 07/01/2017 | 3.76 | 5.31 | 6.31 | 81 FR 38159 (June 13, 2016). |
| 07/01/2015 | 07/01/2016 | 4.29 | 5.84 | 6.84 | 80 FR 42488 (July 17, 2015). |
| 07/01/2014 | 07/01/2015 | 4.66 | 6.21 | 7.21 | 79 FR 37301 (July 1, 2014). |
| 07/01/2013 | 07/01/2014 | 3.86 | 5.41 | 6.41 | 78 FR 59011 (September 25, 2013). |
Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans first disbursed on or after July 1, 2006, and before July 1, 2013, have fixed interest rates that are specified in section 455(b) of the HEA (20 U.S.C. 1087e(b)). Chart 3 shows the interest rates for these loans.
| Loan type | Borrower type | First disbursed on/after | First disbursed before | Interest rate (%) |
|---|---|---|---|---|
| Subsidized | Undergraduate students | 07/01/2011 | 07/01/2013 | 3.40 |
| Subsidized | Undergraduate students | 07/01/2010 | 07/01/2011 | 4.50 |
| Subsidized | Undergraduate students | 07/01/2009 | 07/01/2010 | 5.60 |
| Subsidized | Undergraduate students | 07/01/2008 | 07/01/2009 | 6.00 |
| Subsidized | Undergraduate students | 07/01/2006 | 07/01/2008 | 6.80 |
| Subsidized | Graduate or professional students | 07/01/2006 | 07/01/2012 2 | 6.80 |
| Unsubsidized | Undergraduate and graduate or professional students | 07/01/2006 | 07/01/2013 | 6.80 |
| PLUS | Graduate or professional students and parents of dependent undergraduate students | 07/01/2006 | 07/01/2013 | 7.90 |
| 2 Effective for loan periods beginning on or after July 1, 2012, graduate and professional students are no longer eligible to receive Direct Subsidized Loans. | ||||
Section 455(b) of the HEA specifies that all Direct Consolidation Loans for which the application was received on or after February 1, 1999, have a fixed interest rate that is equal to the weighted average of the interest rates on the loans consolidated, rounded to the nearest higher one-eighth of one percent. For Direct Consolidation Loans for which the application was received on or after February 1, 1999, and before July 1, 2013, the interest rate may not exceed 8.25 percent. However, under 455(b) of the HEA the 8.25 percent interest rate cap does not apply to Direct Consolidation Loans made based on applications received on or after July 1, 2013. Chart 4 shows the interest rates for fixed-rate Direct Consolidation Loans.
| Application received | Interest rate (%) | Maximum interest rate (%) |
|---|---|---|
| On/after 07/01/2013 | Weighted average of the interest rates on the loans consolidated, rounded to the nearest higher one-eighth of one percent. | None |
| On/after 02/01/1999 and before 07/01/2013 | (same as above) | 8.25 |
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Program Authority:20 U.S.C. 1087, et seq.
Richard Cordray,
Chief Operating Officer, Federal Student Aid.
[FR Doc. 2021-17056 Filed 8-10-21; 8:45 am]
BILLING CODE 4000-01-P