When Does Interest Accrue on Student Loans?
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What is interest on student loans? When does interest accrue on the different kinds of student loans? How does deferment and forbearance affect the interest on student loans? What are some ways to lower student loan payments?
What Is Interest on Student Loans?
Student loans accrue interest on a daily basis, which can add to the total cost of the loan. How much interest accrues is based on the interest rate. Federal loans have fixed rates, meaning they remain the same throughout the term of the loan. Private loans may have either fixed rates or variable rates that can vary over time. Though federal loans have fixed interest rates, the rates differ among types of loans and whether the loan is for undergraduate studies or graduate studies. Direct Subsidized and Unsubsidized Loans for undergraduate students is 5.50% Direct Unsubsidized Loans for graduate students is 7.05% Direct PLUS Loans for graduate students or parents is 8.05%
When Interest Starts Accruing for Private Student Loans
When Interest Starts Accruing for Unsubsidized Student Loans
When Interest Starts Accruing for Subsidized Loans
How Deferment Affects Student Loan Interest
Direct Subsidized Loans, Subsidized Federal Stafford Loans, Federal Perkins Loans, plus any subsidized part of a Consolidation Loan don’t accrue interest while in deferment. Direct Unsubsidized Loans, Unsubsidized Federal Stafford Loans, Direct PLUS Loans, and the Unsubsidized part of a Consolidation Loan do accrue interest during deferment, which the borrower is responsible for paying.
How Forbearance Affects Student Loan Interest
Tips for Lowering Student Loan Payments
Refinancing Student Loans
Income-Based Repayment Plans
Saving on a Valuable Education (SAVE) Plan, which replaces the Revised Pay As You Earn (REPAYE) Plan Pay As You Earn (PAYE) Income-Contingent Repayment (ICR) Income-Based Repayment (IBR)
Student Loan Consolidation
Compare Student Loan Refinancing Rates
Frequently Asked Questions
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