Rates on education loans reach A+ levels
The U.S. Department of Education sets variable loan
rates each year based on the rate for 91-day treasury bills at the
last auction in May. On May 31, the rate for 91-day treasury bills
was 3.0, an increase of 1.93 percent from 2004.
Because of this, interest rates on Stafford loans,
the largest source of student loan funds in the country, and Parent
Loan for Undergraduate Students (PLUS) loans, a popular loan program
for parents, increased for the first time in 5 years.
On July 1, the interest rate on federal Stafford loans
will increase from 3.37 percent to 5.30 percent and the interest
rate on federal PLUS loans increases to 6.10 percent from 5.07 percent.
These interest rates only apply to Stafford loans
and PLUS loans disbursed after July 1, 1998. The rate increase will
remain in effect through June 30, 2006.
-- Updated: June 9, 2005