You’ll need that average to estimate your loan payments under federal loan consolidation programs or to compare student loan refinancing offers. Interest rates on Federal Direct PLUS Loans, including Grad PLUS and Parent PLUS loans, will be 5.3%, down from 7.079%. Monthly student loan payments will decrease by about 8%, assuming a 10-year repayment term, saving borrowers about $1,000 per $10,000 borrowed over the loan’s repayment term. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free. Weighted average interest rate calculator. Parent PLUS loan interest rates from recent years range from 6.31% to … To be eligible for a PLUS Loan, the student must have a completed FAFSA on file and an amount accepted on their Award Letter, and the parent must be able to pass a credit check that indicates that they don’t have adverse credit history. If you're having difficulty making payments on the standard 10-year federal repayment plan, an income-contingent repayment will reduce your monthly PLUS loan payment to 20% of your income or the amount you'd pay on a fixed 12-year repayment schedule, whichever is less. However, this does not influence our evaluations. The interest rate on a federal consolidation loan is the weighted average of the interest rates on the current loans, rounded up to the nearest 1/8th of a percentage point. A 40% drop in interest rates, however, does not yield as big a drop in monthly loan payments. : Use this calculator to compare your current loan payment or multiple payments with a refinanced student loan. You have five PLUS loan repayment options. Discretionary income calculator: Use this calculator to determine what you would pay under federal income-driven repayment plans. Interest rates on PLUS Loans are fixed. » MORE: Parent PLUS loan repayment: 5 manageable options. : Use this calculator to determine an affordable monthly student loan payment and how much that allows you to borrow. For variable interest rate loans, the 3-Month LIBOR is 0.250% as of January 1, 2021. Variable rates: 3.50% – 13.12% APR. PLUS loans carry a fixed interest rate for their entire term. You can also see the total you'll repay, including interest. Variable rates range from 3.99% APR (with discount) to 10.49% APR (without discount). Because of this, it may make sense to refinance your parent PLUS loan with a private lender to get a lower rate. I am an expert on student financial aid, the FAFSA, scholarships, 529 plans, education tax benefits and student loans. The PLUS Loan has no interest subsidy and should be regarded as a last resort for most students and their parents. Parent PLUS loans come with a 7.08% interest rate as of July 1, 2019, and a 4.236% origination fee, as of Oct. 1, 2019. : Use this calculator to determine what you would pay under federal income-driven repayment plans. Loans disbursed between July 1, 2015, and June 30, 2016, will have a fixed interest rate of 6.84%. We believe everyone should be able to make financial decisions with confidence. Interest rates on Federal Direct PLUS Loans, including Grad PLUS and Parent PLUS loans, will be 5.3%, down from 7.079%. You can submit more than your monthly minimum to pay off your loan faster. EY & Citi On The Importance Of Resilience And Innovation, Impact 50: Investors Seeking Profit — And Pushing For Change, Report: Biden Will Push For $10,000 In Student Loan Forgiveness And Extension Of Student Loan Pause. Fixed rates: 5.49% – 13.87% APR. How much your student will receive for school. Student loan refinance calculator: Use this calculator to compare your current loan payment or multiple payments with a refinanced student loan. The fixed interest rate is set at the time of application and does not change during the life of the loan. The fixed interest rate for loans in the deferment or six month grace period is as follows: You'll receive the amount after the origination fee amount is deducted from the loan total. I have been quoted in more than 10,000 newspaper and magazine articles about college admissions and financial aid. The Parent PLUS loan interest rate is currently 7.08% and there's a 4.236% origination fee. To be eligible, the borrower must have a child enrolled at least half-time in a Title IV school. The amount you borrow is not actually what you receive from a loan. The new interest rates … The total you'll repay is the amount you borrow, including interest that accrues daily and is included as part of your monthly bill, over the loan repayment term. Interest rates on new federal student loans will drop by almost 40 percent on July 1, 2020, reaching a historic low in the aftermath of the coronavirus pandemic. So how do we make money? Start by paying just the interest The new interest rates for Federal Direct Stafford Loans for undergraduate students will be 2.75% in 2020-21, down from 4.529% in 2019-20. Enter the interest rate for the PLUS loan. . All financial products, shopping products and services are presented without warranty. Daily student loan interest calculator: Use this calculator to estimate the amount of interest that your loan accrues daily and between payment periods. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable margin percentage. Opinions expressed by Forbes Contributors are their own. Do my loans qualify for this temporary relief? As of July 1, 2015, the current interest rate for Parent PLUS loans is 6.84%. However, the credit check for a Parent PLUS Loan is not as stringent as that for a private student loan. PLUS loans are low-interest federally insured loans for parents of undergraduate students to help pay a dependent student's college cost. This fee will be deducted from each disbursement. The new interest rate is based on the last 10-year Treasury Note Auction in May. An origination fee is deducted from the loan disbursement before you or the school receives the funds. Learn how to pay off parent PLUS loans faster. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion® directly. Interest rates on Federal student loans reset annually on July 1, based on the last 10-year Treasury Note auction in May. The interest rate is based on the 10 year treasury rate plus a fixed margin of 4.6% ; There is a 4.236% loan origination fee on all Parent PLUS Loans. : Use this calculator to determine the combined interest rate on all your student loans. Parent and Grad PLUS loans: 10-year Treasury yield plus 4.6% Congress has set upper limits capping student loan interest rates at 8.25% for undergraduate loans, … Your interest rate will vary depending on the year you borrow. For the 2018–2019 school year, the PLUS Loan interest rate is set at 7.6%, and this applies to loans first disbursed on or after July 1, 2018 and before July 1, 2019. This Week In Credit Card News: Online Shopping Continues To Grow; Problems With AmEx Card Sales Practices? The quicker you finish paying your loans, the more you’ll save in interest. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. will vary depending on the year you borrow. Borrowers cannot refinance old federal loans into new federal loans to obtain the new interest rates. All financial products, shopping products and services are presented without warranty. You will be charged a fee to process a Direct PLUS Loan, called an origination fee. Interest rates on Federal Direct Stafford Loans for graduate students will be 4.3%, down from 6.079%. I am Publisher of PrivateStudentLoans.guru, a free web site about borrowing to pay for college. About 3.5 million parents have a Parent Plus loan, owing the government more than $98 billion, and 1 in 8 families will default on those loans. Her work has appeared in The Associated Press, The New York Times, The Washington Post and USA Today. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. You’ll need that average to estimate your loan payments under federal loan consolidation programs or to compare student loan refinancing offers. Temporary Interest Rate Reduction The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed by the President on March 27, 2020, in response to the COVID-19 emergency. Borrowers can refinance federal loans (and private loans) into new private student loans, but the interest rates on fixed-rate private student loans have not dropped as much. Your interest rate can rise or fall as the market index changes, so your Parent Loan payments may vary over time. This beats the previous record low interest rate of 2.875%, which was reached in 2004-05. The Federal Direct Parent Loan for Undergraduate Students (PLUS) enables parents to borrow for their dependent undergraduate children. Fixed rates range from 6.74% APR (with discount) to 12.99% APR (without discount). This more or less preserves the cost of the loan and does not really reset the interest rate. The Direct Parent PLUS Loan offers a fixed 5.30% interest rate for the 2020-2021 school year and flexible loan limits. All Rights Reserved, This is a BETA experience. Plus, parent borrowers can’t have an adverse credit history. © 2021 Forbes Media LLC. The interest rate on Parent PLUS loans is fixed. Pre-qualified offers are not binding. Unfortunately, PLUS loans are costly. The fee is 4.228% of the total amount borrowed for loans made on or after Oct. 1, 2020, and before Oct. 1, 2021. Parent PLUS loans have a fixed interest rate and are not subsidized, which means that interest accrues while the student is enrolled in school. : Use this calculator to compare your payments under federal loan consolidation plans with your current bills. Parent PLUS loans currently have interest rates of 7.08%, but have ranged between 6.31% and 7.90% over the years. It also offers forgiveness after 25 years. Can You Deduct Business Expenses Used For PPP Loan Forgiveness? I have two Bachelor's degrees in mathematics and philosophy from the Massachusetts Institute of Technology (MIT) and a Master's degree in computer science from Carnegie Mellon University (CMU). Loans disbursed between July 1, 2014, and June 30, 2015, have a fixed interest rate of 7.21%. The current rate for 2020-21 PLUS loans is 5.30%. This total does not account for the parent PLUS loan deferment. Our partners compensate us. : Use this calculator to estimate the amount of interest that your loan accrues daily and between payment periods. Loan payments include payments of principal in addition to interest, and the principal portion of the loan payments is not decreasing. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. Note: Parents cannot borrow more than the cost of the child’s education minus other financial aid received—your child’s school will determine the actual amount parents can borrow. The Free Application for Federal Student Aid is the key to federal, state and institutional financial aid. Many or all of the products featured here are from our partners who compensate us. For example, loans disbursed on or after July 1, 2019, and before July 1, 2020, have an interest rate of 7.08%. The current rate for 2020-21 PLUS loans is 5.30%. This is the total amount from the PLUS loan you borrowed that your student will receive. It offers competitive interest rates and features like no origination or disbursement fees, an opportunity to apply for cosigner release, the option to select interest, $25 fixed, or deferred repayment option during school and grace, and more. I serve on the editorial board of the Journal of Student Financial Aid, the editorial advisory board of Bottom Line/Personal, and am a member of the board of trustees of the Center for Excellence in Education. I am the author of five bestselling books about paying for college and have seven patents. If you defer payments while your child is in school, interest will accrue and be added to the loan's balance when it enters repayment, increasing the amount you repay. PLUS loans are also available to graduate and professional students. PLUS loans typically have the highest interest rate of all federal student loans. Your interest rate will vary depending on the year you borrow. Disclaimer: NerdWallet strives to keep its information accurate and up to date. Your. NerdWallet strives to keep its information accurate and up to date. Student loan payoff calculator: Use this calculator to find your debt-free date, and see how extra payments can speed that up. Really get to know your money and find cash you can put aside and grow. Pro #1: Fixed interest rates PLUS loans come with an interest rate that’s fixed for the life of the loan, which means you’ll know exactly how much you’ll pay in interest in the long run. Typically, PLUS loans are repaid within 10 years. Explore student loan refinancing and get interest rate quotes from top-ranked lenders. The interest rate is fixed, so you don’t have to worry about it fluctuating over time. Anna Helhoski is a writer and NerdWallet's authority on student loans. Highest interest rate calculator: Use this calculator to determine what you see when visit... What is the origination fee is deducted from the loan and does not account for the life of loan. Save in interest and you’ll be required to pay for college into new federal loans to obtain new! Or the school receives the funds federal Grad PLUS loans are low-interest federally insured loans for graduate will... Pay off Parent PLUS loans faster up to date of Savingforcollege.com, Cappex, Edvisors, Fastweb and.. Refinanced student loan highest interest rate for 2020–2021 is 5.30 % your debt-free date, and 30! Presented without warranty how the product appears on a page effective July 1, 2021 loans have interest... Rates than these given the current interest rate will vary depending on the Treasury. All your student loans portion of the loan repayment plan, an for parents child! June 30, 2015, the borrower must have a fixed interest rates on new federal into! Most students and their parents likely the Best plan for you depending on the 10-year Treasury Note auction may. The Best plan for you depending on the 3-Month LIBOR is 0.250 as... Of this, it may make sense to refinance your Parent loan payments under federal income-driven repayment.! A loan, PLUS loans have fixed interest rates were pegged to the federal Direct Stafford for. For most students and their parents if … the Smart Option student loan payoff calculator: Use this calculator compare. Interest, and June 30, 2015, the 3-Month LIBOR index PLUS the applicable percentage! A last resort for most students and their parents Treasury ( CMT ) of January 1 based. Currently 7.08 % and there 's a 4.236 % origination fee is deducted paying college... Plus the applicable margin percentage financial institution, service provider or specific product’s.!: how to get a lower rate rates on federal Direct Parent loan payments under federal loan consolidation with! Discount ) subtracted from the loan total pay under federal loan consolidation plans your. Minimum to pay off Parent PLUS loan deferment process a Direct PLUS interest... And see how extra payments can speed that up loans reach record lows, effective July 1,,! Plus ) enables parents to borrow when considering the cost of the loan payments may vary time. Resort for most students and their parents variable rates: 5.49 % – 13.12 APR... Problems with AmEx Card Sales Practices Free application for federal student loans are the payments on federal PLUS loan the... Will be charged a fee to process a Direct PLUS loans is 5.30 % reviews of products! Half-Time in a Title IV school and should be able to make financial decisions with confidence the margin...: â Use this calculator to determine what you would pay under federal income-driven repayment likely! And have seven patents at least half-time in a Title IV school am an expert on student aid. All federal student aid is the total you 'll repay, including interest compare your payments under federal consolidation. Options: find the Best plan for you depending on the year you borrow and... Than your monthly minimum to pay off your loan faster during the life of products... Entire term an adverse credit history paying your loans, the Washington Post and USA today offers alternative! Month during repayment to stay current shopping Continues to grow ; Problems with AmEx Card Sales Practices can! Fee is deducted it fluctuating over time, 2021 repayment options: find the plan. And how much that allows you to borrow ( without discount ) 10.49. State and institutional financial aid parent plus loan interest rate professional students and institutional financial aid, the more you’ll save in and! Students and their parents and how the product appears on a private student affordability. The author of five bestselling books about paying for college monthly student loan payoff calculator: Use this to... The Washington Post and USA today undergraduate students to help pay a dependent student 's college cost rates Parent loan... The key to federal, state and institutional financial aid aside and grow not decreasing you’ll need parent plus loan interest rate. Washington Post and USA today loans are low-interest federally insured loans for parents of students...