This page summarizes the interest rates, loan limits, and other terms for federal student loans issued from July 1, 2026 through June 30, 2027.
Basic Eligibility Requirements
U.S. citizens or permanent residents, enrolled at least half time in a qualified program at a participating school, and not in default on a prior federal student loan. Total aid, including student loans, cannot exceed the school’s total cost of attendance (tuition and fees, room and board, transportation, personal and miscellaneous expenses). FAFSA required.
Direct Subsidized and Unsubsidized Loans for Undergraduate and Graduate/Professional Students
Types
Direct Subsidized Loan: Available only to undergraduate students on the basis of financial need. No credit check required. The federal government covers the interest on these loans while borrowers are enrolled at least half time and for six months after they are no longer enrolled at least half time. Monthly payments are not required until six months after leaving school.
Direct Unsubsidized Loan: Available to undergraduate and graduate students regardless of financial need. No credit check required. Interest is charged throughout the life of the loan. Monthly payments are not required until six months after leaving school.
Interest Rates
The interest rate for Direct Loans for undergraduate students, both subsidized and unsubsidized, is 6.52%. Rates are fixed for the life of the loan.
The interest rate for unsubsidized Direct Loans made to graduate and professional students is 8.07%. Rates are fixed for the life of the loan.
Loan Fee
1.057% if first disbursed on or after October 1, 2020 and before October 1, 2027.
Annual Loan Limits
Annual loan limits are maximum loan amount that can be borrowed each academic year.
Dependent undergraduate students (most students under the age of 24): $5,500 as freshmen (including up to $3,500 subsidized); $6,500 as sophomores (including up to $4,500 subsidized); $7,500 as juniors and beyond (including up to $5,500 subsidized).
Independent undergraduate students (students age 24 or older) and dependent undergraduate students whose parents are unable to obtain Parent PLUS Loans: $9,500 as freshmen (including up to $3,500 subsidized); $10,500 as sophomores (including up to $4,500 subsidized); $12,500 as juniors and beyond (including up to $5,500 subsidized).
Graduate and professional students: See this resource from the National Association of Student Financial Aid Administrators and this resource from the U.S. Department of Education.
Aggregate Loan Limits
Aggregate loan limits are the maximum amount of unpaid principal balance minus any capitalized interest that can be outstanding at any point in time on all of a borrower’s subsidized and unsubsidized loans for undergraduate, graduate, or professional study.
Dependent students: $31,000 (including up to $23,000 subsidized).
Independent undergraduate students and dependent undergraduate students whose parents are unable to obtain Parent PLUS Loans: $57,500 (including up to $23,000 subsidized).
Parent PLUS Loans
Loans available to parents of dependent students to help pay for undergraduate education. Parents are responsible for all principal and interest. Credit check required. The credit requirement can be met by a cosigner. May require a separate application in addition to the FAFSA.
Interest Rates
9.07%. Rates are fixed for the life of the loan.
Loan Fee
4.228% if first disbursed on or after October 1, 2020.
Annual Loan Limit
$20,000 per dependent student, per year.
Aggregate Loan Limit
$65,000 per dependent student, regardless of any amounts repaid, forgiven, or discharged.
Graduate PLUS Loans
Graduate PLUS: Beginning July 1, 2026, graduate and professional students enrolling in a new course of study, enrolling in a new school, and/or taking out a Direct Loan for the first time for a program in which they’re enrolled, won’t be eligible for a Graduate PLUS loan.
Lifetime Loan Limit
The lifetime loan limit for all borrowers is $257,500. This is the maximum amount a borrower can receive, regardless of any amount paid or discharged, in any combination of subsidized loans, unsubsidized loans, and PLUS loans for graduate or professional study.
How Interest Rates are Determined
Fixed-Rate Loans
All Direct Subsidized and Unsubsidized and PLUS loans originated since July 1, 2006 have fixed rates. Since 2013, fixed rates for new loans are set each year based on the 10-year Treasury note following the May auction (4.468%) plus a set margin of 2.05 percentage points for Direct Subsidized and Unsubsidized Loans for undergraduate students, 3.60 points for Direct Unsubsidized Loans for graduate and professional students, and 4.60 points for PLUS loans. Although rates for new loans are set each year, rates are fixed for the life of the loan.
Variable-Rate Loans
For older loans with variable rates, interest rates change annually on July 1, based on the last 91-day Treasury auction in May.
During Repayment
Rate Reduction for Automatic Electronic Payments
Borrowers may be eligible for an interest rate reduction if they sign up for automatic payments online. For more information, see this page from the U.S. Department of Education.
Income-Driven Repayment Plans
There are several income-driven repayment plans that can help keep payments more manageable by capping them at a percentage of the borrower’s income. For more information about these plans and to estimate monthly loan payments, see studentaid.gov/idr.
Public Service and Teacher Loan Forgiveness
Public Service Loan Forgiveness is available after 10 years of qualifying payments and employment, only for Direct Loans (excluding Parent PLUS). The Teacher Loan Forgiveness Program is available for loans in both the Direct and FFEL programs. All federal loans issued since July 1, 2010 are Direct Loans. Teachers with Perkins Loans may be eligible for a loan cancellation if they meet certain requirements. More information for teachers can be found at studentaid.gov.
Loan Consolidation
Borrowers with Direct and/or FFEL loans can convert them into a Direct Consolidation Loan. There is no fee. For more information, or to apply online, visit studentaid.gov.
For more information about federal student aid, please visit the Department of Education’s website at studentaid.gov.
