National Student Loan Data System (NSLDS) for Students
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NSLDS is a repository of information from many sources. Changes to the data are made by those sources. Collecting the data into one central location such as NSLDS gives you convenience and saves you time. If for any reason you disagree with the information reported to NSLDS, please contact one or more of the sources of your data listed on the detail pages on this site. The Department is also available as a resource at 1-800-4FEDAID if you need additional assistance. Your comments and corrections will help improve the services NSLDS provides.
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Interest

Interest


Interest is money paid to the lender in exchange for borrowing money. Interest is calculated as a percentage of the unpaid principal amount (loan amount) borrowed.


Interest Rate


The following table provides interest rates for Direct Unsubsidized Loans.


First Disbursed
Grade Level
Fixed Interest Rate
July 1, 2013 - June 30, 2014
Undergraduate
3.86%
Graduate/Professional
5.41%
Before July 1, 2013
All
6.8%

The interest rate on Direct Unsubsidized Loans is a fixed rate that is calculated in June of each year and that applies to all Direct Unsubsidized Loans first disbursed on or after July 1 of that year and before July 1 of the following year. The fixed interest rate on a Direct Unsubsidized Loan will vary depending on when the loan was first disbursed, and whether the loan was made to an undergraduate student or to a graduate or professional student. For Direct Unsubsidized Loans made to undergraduate students, the maximum interest rate will not exceed 8.25%. For Direct Unsubsidized Loans made to graduate or professional students, the maximum interest rate will not exceed 9.5%.


When a TEACH Grant is converted to a Direct Unsubsidized Loan, the fixed interest rate on the Direct Unsubsidized Loan will depend on when the TEACH Grant was first disbursed, and whether the TEACH Grant was made to an undergraduate student or to a graduate or professional student.


Example 1: The interest rate on Direct Unsubsidized Loans made to undergraduate students and first disbursed during the period July 1, 2013 through June 30, 2014 is 3.86%. If a TEACH Grant that is first disbursed to an undergraduate student during this period is later converted to a Direct Unsubsidized Loan, the same interest rate will apply.


Example 2: The interest rate on Direct Unsubsidized Loans made to graduate or professional students and first disbursed during the period July 1, 2013 through June 30, 2014 is 5.41%. If a TEACH Grant that is first disbursed to a graduate or professional student during this period is later converted to a Direct Unsubsidized Loan, the same interest rate will apply.


If you qualify under the Servicemembers Civil Relief Act, the interest rate on loans you obtained prior to military service may be limited to 6% during your military service. If you believe that you are eligible for this benefit, contact your TEACH Grant servicer for information about the documentation you must provide.


Payment of Interest


Except as explained below for certain military service members, interest is charged on a TEACH Grant that is converted to a Direct Unsubsidized Loan during all periods (starting on the date of the first and each subsequent disbursement of the TEACH Grant), including deferment and forbearance periods.


  • At the time your TEACH Grant is converted to a loan, you will be given the opportunity to pay the interest that accrued. If you do not pay this interest, it will be capitalized (see below) when the loan enters repayment at the end of the six-month grace period.
  • You will also be given the opportunity to pay the interest that accrues during deferment, forbearance, or other periods as provided under the laws and regulations that apply to Direct Unsubsidized Loans. If you do not pay this interest, it will be capitalized at the end of the deferment, forbearance, or other period.

If you are serving on active duty in the military, interest will not be charged on Direct Loans first disbursed on or after October 1, 2008 during periods of qualifying active duty military service (for up to 60 months).


Interest Capitalization


Capitalization is the addition of unpaid interest to your loan principal.


  • Capitalization increases the unpaid principal of your loan, and interest will then be charged on the higher principal balance.
  • This means that you will pay more interest over the life of your loan.

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Information contained on these pages reflects the most current data in the NSLDS database. The data contained on this site is for general information purposes and should not be used to determine eligibility, loan payoffs, overpayment status, or tax reporting. Please consult the Financial Aid Officer at your school or the specific holder of your debts for further information.

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