Student loan interest rates is back into the news once more. President Obama moved towards interest rates in his County of this new Commitment address in the . This time people is apparently up to speed and work out an excellent transform. Although, for the most recent fiscal seasons () undergraduate pupils was paying step three.4% to your unsubsidized finance together with government is purchasing 3.4% with the backed loans (once the beginner is actually college), the news headlines media try ignoring the reality that graduate children keeps started paying six.8% into unsubsidized fund all the with each other. They certainly were perhaps not considering the same crack the fresh undergraduate pupil society obtained five years before.

Was student loan interest levels too much? Just before 1988, the latest Federal Stafford Mortgage interest is actually 9% as well as a short period ranging from 1988 and you may 1992, the fresh cost was basically a hybrid 8% 10%, the spot where the basic four years off cost the speed try 8% right after which they jumped so you’re able to 10% on the remaining 6 several years of an elementary loan fees months. First, from inside the 1992 the latest Government Stafford Mortgage interest rate is lay for each and every July 1 utilizing the 91-big date Treasury expenses including step three.1%. In the 1995, that formula is actually modified towards the 91-time Treasury costs including dos.5%. Afterwards from inside the 1998, Congress accepted the brand new formula to-be the brand new 91-time Treasury expenses along with 1.7%. Inside the 2006, Congress moved to improve the interest costs presently 6.8%. This is done to stabilize the brand new program’s cost immediately following a good 5 seasons extend in which rates of interest had been from the its historic lows (ranging from 2.77 5.39%). Read more