Under the new law, some 11 million borrowers will see their interest rates decrease on new loans made after July 1, 2013. Find out more about new loans made after July 1, 2013.
Interest rates on all new student loans this year and saving a typical undergraduate student $1,500 over the life of his or her loans and guarantees borrowers are able to lock-in rates over the life of their loans.
About 8.8 million undergraduate borrowers will see rates drop from 6.8% to 3.86%, while about 1.5 million graduate unsubsidized Stafford borrowers will see rates drop from 6.8% to 5.41%. Moreover, over 1 million Grad PLUS and Parent PLUS borrowers will see rates drop from 7.9% to 6.41% (the first reduction in years).
A new analysis by the Consumer Financial Protection Bureau takes a closer look at the more than $1 trillion in outstanding federal student loans, as well as alternative repayment plans to lower payments.