Government Loans

Interest

Recent changes have given all federal loans a new rate structure as of July 1, 2006.

While the amount you can borrow (approx. $3,000) is rather limited, federal loans to students do carry a relatively low interest rate: 6.8% as of July 1, 2006.

Parents often assume that the interest rate on PLUS (parent) loans is equally low. It is not. In 2006, the rate for PLUS loans stood at a not-inconsiderable 8.5% -- that is, in fact, higher than the current rate on many private education loans. See CampusDoor.com for more information.