Congress extends reduced rate on subsidized student loans

On June 29, 2012, Congress voted to extend the 3.4% interest rate for subsidized federal student loans for one year.

This rate applies only to undergraduate students who borrow subsidized federal student loans for the 2012-2013 academic year.

The Budget Control Act of 2011 eliminated subsidized loans for graduate and professional students, effective July 1, 2012. Graduate and professional students may continue to borrow unsubsidized loans.

A summary of rates for the 2012-2013 academic year can be found below:

Direct Stafford Subsidized: 3.4%

Direct Stafford Unsubsidized: 6.8%

Direct PLUS Graduate (Grad PLUS): 7.9%