Interest Rate Calculator for Unsubsidized Loans for Students

unsubsidized loan interest rate
Home » Education Loan » Interest Rate Calculator for Unsubsidized Loans for Students

Every July 1st for the upcoming academic year, the federal government sets the interest rate for unsubsidized student loans. The interest rate for unsubsidized student loans for the school year 2023–2024 is 6.80% for college freshmen, for graduate and professional students, the rate is 7.05%, for parents of dependent undergraduate students or graduate or professional students receiving Direct PLUS Loans, the rate is 8.05%. Read this article to know about unsubsidized loan interest rates

What are Unsubsidized Loans

Loans for graduate and undergraduate students that are not based on financial need are known as unsubsidized loans. Your cost of attendance less any additional financial help (like grants or scholarships) will be used to establish your eligibility. During in-school, deferment, and grace periods, interest is incurred. In contrast to a subsidised loan, you are in charge of paying the interest on an unsubsidized loan from the time it is disbursed until it is repaid in full. 

Must Read: WHAT ARE DACA LOANS FOR STUDENTS? HERE’S THE COMPLETE GUIDE!

Benefits of Unsubsidized Loans 

Unsubsidized loans have several advantages, including the following:

  • Borrowers of unsubsidized loans are not required to prove they have any financial necessity. They are especially useful if you still require additional funds to pay for school expenses after borrowing your allotted amount from need-based loans.
  • Students in graduate and professional programmes as well as undergraduate ones are eligible for subsidised loans.
  • The major difference between subsidised and unsubsidized loans is that the borrower can get more money with unsubsidized loans.
  • You have greater freedom under an unsubsidized government repayment plan than under a private loan.
  • Unsubsidized loans do not require credit checks, in contrast to private loans.

Interest Rate 

You must pay back an unsubsidized loan interest rate with a fixed interest rate for the remainder of your life if you receive one.

  • The current interest rate for unsubsidized student loans is 6.54% for the 2022-2023 academic year.
  • The unsubsidized loan’s interest rate for students is 3.73%.
  • The interest rate for unsubsidized loans for graduates or professional students is 5.28%.
  • The variable interest rate on unsubsidized loans is the same as that on subsidised loans. Your interest rate will never be higher than 8.25%.
  • Every year on July 1, the federal formula is used to determine the actual interest rate for your loan.

Interest Loan With Loan Types 

Here is the table which helps you to get an idea about Interest rates with the type of loan

Loan Type BorrowerInterest Rate
(for loans disbursed from 7/1/23 to 7/1/24)
Interest Rate
(for loans disbursed from 7/1/22 to 7/1/23)
Origination Fee
(for loans disbursed from 10/1/21 to 9/30/23)
UnsubsidizedStudent 5.50% Fixed for undergraduates4.99% Fixed for undergraduates1.057%
UnsubsidizedGrad Student7.05% Fixed for graduates6.54% Fixed for graduates1.057%
SubsidizedStudent 5.50% Fixed for undergraduates4.99% Fixed for undergraduates1.057%
PLUSParent PLUS8.05% Fixed7.54% Fixed4.228%
PLUS Grad PLUS 8.05% Fixed 7.54% Fixed 4.228% 

How student loan interest rate calculated 

This is how we calculate the unsubsidized loan interest rate 

  • Direct unsubsidized loans for undergraduates: 10-year Treasury + 2.05%, capped at 8.25%
  • Direct unsubsidized loans for graduates: 10-year Treasury + 3.60%, capped at 9.50%

Must Read: HOW TO INCREASE YOUR SAVINGS ON STUDENT LOAN? HERE’S THE ANSWER

How to Apply 

Here are the procedures for requesting unsubsidized student loans:

  • Fill out the FAFSA or Free Application for Federal Student Aid. Visit studentaid.gov to complete this task online.
  • Your school will send you a financial assistance offer, which can include federal student loans, once you apply for student loans through FAFSA.
  • You must accept unsubsidized student loans through the financial aid portal of your institution if you are offered them.
  • After that, you must undergo entry counselling and sign a Master Promissory Note (MPN). Visit studentaid.gov to complete this task online.
  • Your school will provide you with the loan money once you have signed your MPN and finished entry counselling.

Documents Required

Here are some of the documents required for education loans that are not subsidised:

  • The Free Application for Federal Student Aid (FAFSA)
  • Proof of Identity (Anyone)
  • Proof of Residence/ Address (Anyone): Passport mandatory in case of Studies Abroad.
  • Academic Transcripts 
  • 10th Result & 12th Result, Graduation Result- Semester-wise (if applicable)

Must Read: HERE’S A GUIDE ON HOW TO QUALIFY FOR THE TOP STUDENT LOAN FORGIVENESS PROGRAMS IN 2023

Example of Direct Unsubsidized Loan

This is an example of unsubsidized loan interest rates. You’ve been given a $1,000 Direct Unsubsidized Loan for one semester.

  • Your gross loan amount is $1,000.
  • Your net loan amount, which is the gross amount less the origination charge, will be disbursed to your student account for $990.

FAQ

Q1. What is the unsubsidized cap?

Ans. For students, you can borrow a maximum of $5,500 to $12,500 every academic year through Direct Unsubsidized Loans, depending on your year of study and your dependent status. The annual cap for Direct Unsubsidized Loans for graduate or professional students is $20,500. Was this page of any use?

Q2. What is a Direct Unsubsidized Loan? 

Ans. A Federal Direct Unsubsidized Loan is a non-need-based, low-interest loan with flexible repayment options. It is available to both undergraduate and graduate students.

Q3. What is a Stafford loan that is not subsidised?

Ans. An unsubsidized loan is not given out based on need. But the FAFSA is still required for applications. You will be charged interest on unsubsidized loans from the time they are disbursed until they are repaid in full.

This article is all about unsubsidized loan interest rates, for more such informative articles follow Fly Finance Blogs and if you have any doubts related to loans to international money transfers, reach out to our experts at 1800572126.

About Aditya Saini

Leave a Comment

Coverage Under Tata AIG Travel Health Insurance for Students Best Overseas Travel Policies for Students Cheapest Forex Cards for Students Best Picks for Student Travel Insurance Top Banks Offering Education Loans for New Zealand Studies! Apply for YES Bank Education Loan Top Up in Easy Steps Top Currency Exchange Providers in Toronto Documents Required for SBI Takeover of Education Loans Where to Exchange Currency in Birmingham? Major Pros and Cons of Student Loan Consolidation
×

Send Money Abroad in <15 mins

×

Request a callback

×

Get an education loan at the lowest interest rate

×

Thank you! Your call request has been submitted

Our team will connect with your shortly

aero Confused which education loan is the best for you?