05.28.08 | New Interest Rates for Variable Rate Federal loans
Effective July 1, 2008…
Variable rate Stafford loan disbursed prior to July 1, 2006, that is IN GRACE (IG) = 3.6%
Variable rate Stafford loan disbursed prior to July 1, 2006, that is IN REPAYMENT (RP) = 4.21%
Variable rate Parent plus loan disbursed prior to July 1, 2006 = 5.01%
* note that any Stafford and PLUS loan that were taken out before July 1, 2006, and has never been consolidated, will have these new rates
* note that with consolidation, these rates are rounded to the nearest 1/8% which would make them:
3.625% Stafford in grace
4.25% Stafford in repayment
5.125% Parent Plus
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Does this mean that any stafford loan disbursed before July 1, 2006 will have the same rate? Or are there still small varations depending on when it was disbursed before July 1, 2006?
June 2nd, 2008 | #
Connie. The 3.6% (in grace) and 4.21% (in repayment) rates above are the same for any loan disbursed after July 1, 1998 before July 1, 2006.
If you have questions regarding a loan disbursed before July 1, 1998, you can read more here: http://www.finaid.org/loans/scripts/interest.cgi
the 91-day T-Bill rate uses in the formula for next year is 1.91%
June 3rd, 2008 | #
What about loans dispersed AFTER July 2006?
June 5th, 2008 | #
Michelle, any loan disbursed after July 2006 is to be FIXED loan. Fixed loan rate was decreased on July 1, 2008 from 6.8% to 6.0
July 3rd, 2008 | #
I don’t understand why it is that I consolidated my loans in 1995 and have an interest rate of 9%. Why can’t that interest rate be changed to current rates? It doesn’t seem fair. I had a loan amount of $40000 and now it is $90000 because I was unable to work for 3 years after I had surgery. Is there any way to change this>
July 11th, 2008 | #
Who sets the variable interest rate and how often do these change? i.e. Where would we go to find information about any upcoming changes to the rate amount? This is important to understanding when/when not to consolidate.
July 25th, 2008 | #
My child has Stafford loans ($9000) @ 6.8% and ($8125) @ 3.61%. Does this mean he will have two payments per month? Should he leave them as is or consolidate?
He also has a $6500 Perkins loan. Which, if any, should he consolidate?
Thanks so much. This is all very confusing to me.
August 6th, 2008 | #
Denice-that is the point of consolidation- you lock in the rate when you consolidate. If you had done any research or read the paper work, you would have realized that this rate is locked, and can’t be changed. It is unfortunate, but that is just how it works. Sorry.
October 21st, 2008 | #
Wow, I’m really amazed at some of the people who have commented. I suppose you guys also have houses that are going into foreclosure because of an ARM that has reset. People-please do a little research on the internet and educate yourself; and don’t just sign papers and forms without reading what they say. Please, break the cycle of stupidity!
October 21st, 2008 | #