student loan interest rate

[matthew0126]

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just thought you guys would be interested. i was watching cnbc today (i'm an avid tech.anal. stocks trader) and joe kernan was talking about how the student loan rate will be lowered to 4.5% in july.

guess that's good for us eh? much better than the 8-9% people were paying just a bit ago or even the 5.9% it is at now

 

[mpp]

Actually, the current Stafford loan rate is 5.39 percent while in school or during the grace period and/or deferrment. During repayment the current rate is 5.99 percent.

The rate is variable and is adjusted each July 1. The rate is set at the 91-day Treasury Bill rate plus 2.3 (or 3.1 while in repayment).

The latest 91-day T-Bill rate (April 15) is 1.680 percent which would give an in-school interest rate for unsubsidized Stafford loans of 3.980 -- a heck of a good deal. The actual rate they use is the rate for the 91-day T-Bill auction held the last week of May. Keep your fingers crossed that the rates continue to slide because once the rate is set, it is set for the entire year even if rates go up. Of course the interest rate is variable, is reset each year, and is not compounded.