Interest rates and fees

When you accept loans, you accept an original amount called a 'principal'. When you enter into repayment, you will repay more than the original principal. Items such as interest and fees may be added to the principal.

Interest is money paid to the lender in exchange for borrowing money and set into law by Congress. Interest is calculated as a percentage of the unpaid principal borrowed. Below are the 2023-2024 interest rates.

Federal Direct Undergraduate Subsidized Loan
Fixed 5.50%

Federal Direct Undergraduate Unsubsidized Loan
Fixed 5.50%

Federal Direct Parent Loan for Undergraduate Students
Fixed 8.05%

The amount of interest that accrues on your loan is determined by a simple daily interest formula. Multiply your loan balance by the number of days since the last payment times the interest rate factor. The interest rate factor is calculated by dividing your loans interest rate by the number of days in the year.

Most student loans will have a loan fees that are a percentage of the total loan amount. The loan fee is deducted from each loan disbursement you receive. This means the loan you receive will be less than the principle you borrow. You will be responsible for repaying the entire principle amount you borrow. Upon entering repayment, borrowers must make their first 12 loan payments on time to keep this benefit. This entire fee goes to the government to help reduce the cost of the loans. For information regarding the loan fee percentage, visit