Looking Ahead to Student Loan Interest Rates in 2014-15

Last year, an announcement was made by the Federal Government that student loan interest rates would be set in accordance to the auction results of the 10-year notes in the Treasury. As a result, there has been a change for such types of loans in 2014-15 that you should be aware of. Here is a look at all of the changes that were made for the upcoming school year.

Student loan interest rates for Stafford Loans have raised from 3.86 percent in the 2013-14 year to the current rate of 4.66 percent for both subsidized and unsubsidized (undergraduates only). For those that are in graduate programs, the interest rate has seen an increase from 5.41 percent to 6.21 percent in 2014-15.

When it comes to PLUS Loans, there has been a rise in interest rate for such types of loans well. For parents, the previous it was set at 6.41 percent but that has risen to 7.21 percent.

This number is identical for those in graduate programs receiving a PLUS Loan. It is expected that these numbers will continue to rise in the coming years, but there is a maximum on those loans cannot be exceeded. For undergraduate subsidized and unsubsidized loans, the maximum interest rate is 8.25 percent. For graduate students this number is 9.5 percent. As for PLUS Loans for parents and graduate students, the maximum is 10.5 percent.

The current interest rates for the 2014-15 school year will be effective from July 1, 2014 through June 30, 2015. If there is a chance in the 2015-16 school years, it will likely be announced in the first week of May, 2015.

Some have received offers for a private loan in which their interest can be lower than even that of a Federal Government loan. It’s rare to see unless you have tremendous credit, but it’s possible. Again, a student loan has more of a chance for being forgiven if you work in some of the right fields.

It’s easier just to pay your related loan on time and over the minimum if you have the needs. Some want a quick fix to eliminate their student loan debt, but the standard repayment is the suggested route.

Make sure to log onto the American Financial Benefits Center website at www.afbcenter.com to get all of the latest news and information on student loans!