Washington, DC, May 8, 2014 -- As students receive and begin reviewing their financial aid packages for the 2014-15 school year, the National Association of Student Financial Aid Administrators (NASFAA) advises them to take a look at their student loans since federal student loan interest rates are set to increase
President Obama last year signed into law a bill that ties student loan interest rates to the 10-year Treasury note auctioned off before June 1. Based on yesterday’s auction, NASFAA projects the 2014-15 interest rates for all Direct Loans with a first disbursement on or after July 1, 2014, will be as follows:
These interest rates were calculated using a base 10-year Treasury note Index of 2.61 percent, plus an add-on amount for each loan program. As with last year, all Direct Loans except Direct Consolidation Loans are “variable-fixed” loans, meaning students will receive a new market-based rate with each new loan taken in subsequent school years, but that the rate is fixed for the life of each loan.
“Though these interest rates have risen from last year, they remain a less expensive and safer option than other forms of credit for the majority of students and families,” said NASFAA President Justin Draeger. “Federal loans offer borrowers more flexible repayment options than loans from banks or other private sources and provide strong safeguards in case of unemployment, sickness, or disability and contain loan forgiveness options for those employed in the public or non-profit sector.”
Understanding the ins and outs of applying for federal financial aid can be a daunting process, but financial aid professionals are an invaluable resource and can assist students and parents in securing the financing needed to pay for their education.
NASFAA recommends students bear the following in mind when borrowing to fund their education:
NASFAA has experts available to speak to reporters as they write about student financial aid issues. Please contact us at firstname.lastname@example.org for additional information or to schedule an interview.
The National Association of Student Financial Aid Administrators (NASFAA) is a nonprofit membership organization that represents nearly 20,000 financial aid professionals at approximately 3,000 colleges, universities, and career schools across the country. NASFAA member institutions serve nine out of every ten undergraduates in the U.S. Based in Washington, DC, NASFAA is the only national association with a primary focus on student aid legislation, regulatory analysis, and training for financial aid administrators. For more information, visit www.nasfaa.org.
Publication Date: 5/8/2014