Stafford and PLUS Loan Rates Set for 05-06

Paying for College
1

<p>The last 91-day Treasury bill auction in May was yesterday and I believe the Stafford and PLUS loan rates for the academic year 05/06 as of July 1 will be the following:</p>

<p>Stafford Loan (In-School Rate): 4.70%
Stafford Loan (Repayment Rate): 5.30%
PLUS Loan: 6.10%</p>

<p>These rates will vary each year and will change each July 1.</p>

<p>Remember that as of right now (barring some change in the Higher Education Act when it is reauthorized), beginning July 1, 2006, for loans for the 06-07 school year, the rates for these loans will be FIXED at 6.8% for the Stafford Loan and at 7.9% for the PLUS loan.</p>

2

<p>So if I apply now, I can lock in the current rate for a PLUS loan before it goes up to 6.1%?
And I can use those funds for the 2005/2006 school year?</p>

3

<p>Nope.</p>

<p>The loan rates are based on when they are originated, not when they are applied for.</p>

<p>Additionally, no payment is due until the loan has been disbursed, and that will not happen (probably) until late August / early September. </p>

<p>Also, since the loan is variable (set every year), even if you borrow now (say for a school year which starts in the summer), your rate will still change as of July 1.</p>

4

<p>Thanks Barkowitz for the clarification- when it comes to financial aid you are the man!</p>