Additionally, can you pay off a direct unsubsidized loan early?
You may prepay all or part of your federal student loan at any time without penalty. Any extra amount you pay in addition to your regular required monthly payment is applied to any outstanding interest before being applied to your outstanding principal balance.
Accordingly, how long do you have to pay off unsubsidized loans?
Generally, you’ll have 10 to 25 years to repay your loan, depending on the repayment plan that you choose. Learn more about your repayment options.
How many years are your term to pay back student loans?
|Income-Based Repayment (IBR)||20 or 25 years, depending on when your loans were first disbursed|
Even though student loan rates are expressed as an annual rate, the interest is usually compounded daily. On a $10,000 loan, you might think that a 4.45% interest rate would mean $445 paid in interest during the year, but that’s not the case. Instead, your annual rate is divided by 365, to get your daily interest rate.
The 2019-2020 federal student loan interest rates are currently 4.53% for undergraduate loans, 6.08% for unsubsidized graduate loans and 7.08% for direct PLUS loans.
Direct Subsidized or Unsubsidized Undergraduate Loans: 3.734% Direct Unsubsidized Graduate Loans: 5.284%
Parent and student loan comparison chart
|Smart Option Student Loan® for Undergraduate Students||Sallie Mae Parent Loan|
|Variable rate*||1.13% APR to 11.23% APR2||3.37% APR to 12.99% APR3|
|Fixed rate*||3.50% APR to 12.60% APR2||5.49% APR to 13.87%3|
6.5% to 9.55% p.a. 8.50% to 9.00% p.a. 7.25% to 9.25% p.a.
Federal student loan interest rates 2020-2021
2.75% for undergraduates. 4.30% for graduate students. 5.30% for parents and graduate students taking out PLUS loans.
What are the interest rates for federal student loans?
|Loan Type||Borrower Type||Fixed Interest Rate|
|Direct Subsidized Loans and Direct Unsubsidized Loans||Undergraduate||3.73%|
|Direct Unsubsidized Loans||Graduate or Professional||5.28%|
|Direct PLUS Loans||Parents and Graduate or Professional Students||6.28%|
Which to Borrow: Subsidized vs. Unsubsidized Student Loans
|How interest works while you’re enrolled in college||Education Department pays interest||Interest accrues|
|Who can borrow||Undergraduate students only||Undergraduate and graduate or professional degree students|
But often with student debt, the interest is so high and the borrower’s income so low, that payments only cover the interest, causing the balance to increase even as borrowers send money to their student-loan company every month.
The interest rates on federal student loans are set by Congress and can change each year. For the 2021-22 academic year, the interest rates on federal Direct Loans will be rising.