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New Federal Loans Interest Rates (2020/2021)

PierreMD

Class of 2024 :)
Jul 4, 2019
223
342
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  1. Pre-Medical
[I posted this in pre-MD, but I thought I'd should share here too. I assume people in the DO sections frequent the MD sections so hopefully they see this]

Hello beautiful people:

Direct Unsub and Grad Plus loan interest rates both fell by 1.779% :)

Direct Unsubsidized= 4.30% (previously 6.079%)
Direct Grad Plus= 5.30% (previously 7.079%)

This is for disbursements between July 1, 2020 through July 1, 2021 so Fall 2020 and Spring 2021 (and Fall 2021 tuition for M4 students whose tuition is due in June). No news yet on whether Direct Unsub limits have changed.

Origination fees for both remained the same at 1.059% and 4.236%. However, they are set to change in October and will most likely fall as well. I'm not sure why fees are by calendar year while rates are by academic.

Still, its some good news amidst the COVID madness.
 
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frenchyn

Full Member
7+ Year Member
Dec 10, 2012
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[I posted this in pre-MD, but I thought I'd should share here too. I assume people in the DO sections frequent the MD sections so hopefully they see this]

Hello beautiful people:

Direct Unsub and Grad Plus loan interest rates both fell by 1.779% :)

Direct Unsubsidized= 4.30% (previously 6.079%)
Direct Grad Plus= 5.30% (previously 7.079%)

This is for disbursements between July 1, 2020 through July 1, 2021 so Fall 2020 and Spring 2021 (and Fall 2021 tuition for M4 students whose tuition is due in June). No news yet on whether Direct Unsub limits have changed.

Origination fees for both remained the same at 1.059% and 4.236%. However, they are set to change in October and will most likely fall as well. I'm not sure why fees are by calendar year while rates are by academic.

Still, its some good news amidst the COVID madness.
Thank you. One and only good news recently...
 
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Captain_Falcon

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2+ Year Member
Aug 7, 2019
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  1. Medical Student

Skarl

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5+ Year Member
Jul 12, 2015
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  1. Medical Student
Not very familiar with finances, but should incoming M1s still borrow semester-by-semester or potentially secure a larger amount of loans to cover total COA at a now lower interest rate?
 

HopefulPilot

Full Member
7+ Year Member
Jul 5, 2012
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  1. Medical Student
You can definitely take it out semester by semester...I only take out loan whenever I need even in middle of semester....to avoid interest accrued.
I'm pretty sure they're asking if they should take out more at the beginning of the year in case interest rates go up. Im pointing out that the interest will be the same throughout the year.
 
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frenchyn

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Dec 10, 2012
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I'm pretty sure they're asking if they should take out more at the beginning of the year in case interest rates go up. Im pointing out that the interest will be the same throughout the year.
Yes interest stay same throughout the year...I am just saying I only take out what I need per semester or whatever I need so it won’t accrue for 6 months for nothing.
 

popopopop

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Dec 18, 2011
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  1. Medical Student
Yes interest stay same throughout the year...I am just saying I only take out what I need per semester or whatever I need so it won’t accrue for 6 months for nothing.

I'm a bit confused here. Are you talking about your FAFSA loan disbursement money? I thought FAFSA disburses twice a year for fall and spring basically.
 

akinetopsia

some dude
10+ Year Member
Feb 17, 2008
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  1. Resident [Any Field]
what if you are a newly graduated MD? does this affect my loans at all?

As a fellow newly graduated MD, the published yearly interest rates are for borrowers during the following academic year, so it doesn't affect newly graduated MDs. Presumably, you're not borrowing, unless you're doing another graduate degree on top of the MD instead of or in addition to residency.

If you have direct loans (government-held but serviced by one of the loan servicers), this doesn't affect you. If you have private loans, this doesn't affect you.

If you're thinking about consolidating your loans, it doesn't take into account the new rates are lower than those of the loans you currently have - consolidation takes a weighted average of the loans you currently have and makes it so you have one loan at that new weighted average (and capitalizes the interest that has grown on your loans up to that point - someone feel free to correct me if I'm wrong).
 

blendermd

Full Member
5+ Year Member
Jul 5, 2015
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  1. Medical Student
As a fellow newly graduated MD, the published yearly interest rates are for borrowers during the following academic year, so it doesn't affect newly graduated MDs. Presumably, you're not borrowing, unless you're doing another graduate degree on top of the MD instead of or in addition to residency.

If you have direct loans (government-held but serviced by one of the loan servicers), this doesn't affect you. If you have private loans, this doesn't affect you.

If you're thinking about consolidating your loans, it doesn't take into account the new rates are lower than those of the loans you currently have - consolidation takes a weighted average of the loans you currently have and makes it so you have one loan at that new weighted average (and capitalizes the interest that has grown on your loans up to that point - someone feel free to correct me if I'm wrong).

yes going into residency... that's a bummer...
 

MavFab

Full Member
2+ Year Member
Oct 17, 2016
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I think it's ridiculous the government charges such a high interest rate for student loans. Considering the federal interest rate is down to 0.25% they should be much lower. It also might end up being a wash for them anyway if a lower interest rate decreased the delinquency rate.
 
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