Variable Student Loan Interest Rates Increase

Variable student loan interest rates increased on July 1st

On July 1, 2007, the interest rates on variable federal Stafford and PLUS loans increased slightly. These new rates apply only to loans issued on or after July 1, 1998 and before July 1, 2006.

The interest rate on Stafford loans in repayment will increase to 7.22% from 7.14%. The interest rate on in-school, grace, or deferment status Stafford loans will increase to 6.62% from 6.54%. And the interest rate on PLUS loans will increase to 8.02% from 7.94%. These rates will be in effect through June 30, 2008. The Department of Education sets the rates once each year based on the last three-month Treasury bill auction held in May.

For all Stafford and PLUS loans issued on or after July 1, 2006, the loans will have a fixed interest rate--6.8% for Stafford loans and 8.5% for PLUS loans.

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