Interest Rates Rise on Federal Student Loans for 2017


Gregory Schill, CFP®. 3480 Torrance Blvd. Suite 102. Torrance, CA 90503. 310-536-7111 [email protected] www.theadvisorygrp.com. Interest Rates Rise on Federal. Student Loans for 2017/2018. Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2017. After falling for two consecutive ...

Gregory Schill, CFP® 3480 Torrance Blvd. Suite 102 Torrance, CA 90503 310-536-7111 [email protected] www.theadvisorygrp.com

Interest Rates Rise on Federal Student Loans for 2017/2018 After falling for two consecutive years, interest rates on federal student loans are now rising. The following table shows the interest rates for new Direct Loans first disbursed on or after July 1, 2017, and before July 1, 2018. The rate is fixed for the life of the loan.

Subsidized vs. unsubsidized What's the difference? With subsidized loans, the federal government pays the interest that accrues while the student is in school, during the six-month grace period after graduation, and during any loan deferment periods. By contrast, with unsubsidized loans, the borrower pays the interest during these periods. Eligibility for subsidized loans is based on financial need. Only undergraduate students are eligible for subsidized loans.

New rate Old rate Available to 2017/2018 2016/2017

Borrowing limits

Direct Subsidized Loans: Undergraduate Students

4.45%

3.76%

Undergraduate students only Subsidized loans are based on financial need as determined by the federal aid application (FAFSA)

For dependent undergraduates: 1st year: $5,500 ($3,500 subsidized) 2nd year: $6,500 ($4,500 subsidized) 3rd, 4th, 5th year: $7,500 ($5,500 subsidized) Max: $31,000 ($23,000 subsidized)

Direct Unsubsidized Loans: Undergraduate Students

4.45%

3.76%

Undergraduate students only

For dependent undergraduates: 1st year: $5,500 ($3,500 subsidized) 2nd year: $6,500 ($4,500 subsidized) 3rd, 4th, 5th year: $7,500 ($5,500 subsidized) Max: $31,000 ($23,000 subsidized)

Direct Unsubsidized Loans: Graduate or Professional Students

6%

5.31%

Graduate or professional $20,500 per year (unsubsidized students only only); max $138,500 ($65,500 Unsubsidized loans only subsidized)

Direct PLUS Loans: Parents and Graduate or Professional Students

7%

6.31%

Parents of dependent undergraduate students and graduate or professional students Unsubsidized loans only

Total cost of education, minus any other aid received by student or parent

Page 1 of 2 Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2017

The information being provided is not a substitute for professional advice. Please contact your professional advisors before acting on any of this information. Securities and investment advisory services offered through FSC Securities Corporation, Member FINRA / SIPC , and a Registered Investment Advisor. Additional investment advisory services offered through The Advisory Group, a Registered Investment Advisor not affiliated with FSC Securities Corporation. Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable - we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Page 2 of 2 Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2017

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