Sequestration to increase Direct Loan Origination Fees
As a result of the ongoing Sequestration, loan origination fees on the Federal Direct Student and Parent Loan programs will see a slight increase to its origination fees, beginning with loans disbursed on or after September 30, 2014. Origination fees are deducted from the loan prior to disbursement. The Direct loan origination fee will increase from 1.072% to 1.073%, and on PLUS Loans, from 4.204% to 4.292%.
Direct Loan Interest rates for 2014-15
With the signing of The Bipartisan Student Loan Certainty Act of 2013, the annual interest rates on the Federal Direct Loan programs were tied to the 10 year Treasury Bill rate and re-set each July 1. The interest rate for undergraduate students for the 2014-15 academic year was increased from 3.86% for both the subsidized and unsubsidized Loans to 4.66%, while interest on the Unsubsidized Direct Loan for graduate students went from 5.41% to 6.21%. The Federal Direct PLUS Loan for both parents and graduate/professional students also saw an interest rate increase from 6.41% to 7.21%.