Beginning in the 2020-2021 school year, interest rates are at an all time historical low for student loans. Before the 2020-2021 school year, the lowest interest rate on student loans was 3.4% for subsidized loans, with unsubsidized loans during those same years experiencing a rate of 6.8%.
Undergraduate student loans in 2020-2021 are set at 2.75%. This makes student loans a very attractive option to help pay for college. Further, beginning March 20, 2020 the federal government suspended the requirement to make payments on student loans and set the interest rate to 0%. These benefits continue until December 31, 2020. There has never been a better time to take advantage of Federal Direct student loans.
Historical Interest Rates for Federal Direct Student Loans
| Award Year | Direct Loans (Undergraduate) | Direct Loans (Graduate) | Direct PLUS Loans (Parent & Grad) | Direct Loans Undergraduate Subsidized | Direct Loans Undergraduate Unsubsidized | Direct Loans Graduate Unsubsidized |
|---|---|---|---|---|---|---|
| 2020-2021 | 2.75% | 4.30% | 5.30% | 2.75% | 2.75% | 4.30% |
| 2019-2020 | 4.53% | 6.08% | 7.08% | 4.53% | 4.53% | 6.08% |
| 2018-2019 | 5.05% | 6.60% | 7.60% | 5.05% | 5.05% | 6.60% |
| 2017-2018 | 4.45% | 6.00% | 7.00% | 4.45% | 4.45% | 6.00% |
| 2016-2017 | 3.76% | 5.31% | 6.31% | 3.76% | 3.76% | 5.31% |
| 2015-2016 | 4.29% | 5.84% | 6.84% | 4.29% | 4.29% | 5.84% |
| 2014-2015 | 4.66% | 6.21% | 7.21% | 4.66% | 4.66% | 6.21% |
| 2013-2014 | 3.86% | 5.41% | 6.41% | 3.86% | 3.86% | 5.41% |
| 2012-2013 | 3.40% | 6.80% | 7.90% | 3.40% | 6.80% | 6.80% |
| 2011-2012 | 3.40% | 6.80% | 7.90% | 3.40% | 6.80% | 6.80% |
| 2010-2011 | 4.50% | 6.80% | 7.90% | 4.50% | 6.80% | 6.80% |
| 2009-2010 | 5.60% | 6.80% | 7.90% | 5.60% | 6.80% | 6.80% |
| 2008-2009 | 6.00% | 6.80% | 7.90% | 6.00% | 6.80% | 6.80% |
| 2007-2008 | 6.80% | 6.80% | 7.90% | 6.80% | 6.80% | 6.80% |
| 2006-2007 | 6.80% | 6.80% | 7.90% | 6.80% | 6.80% | 6.80% |
As long as you are in college or graduate school at least half time (6 credit hours), you do not need make payments on your federal student loans. Payments are not required until you drop below half time for 6 months. Nonetheless, many parents or students want to make payments on their loans, even if it is only for the accrued interest. How can you do that? The first step is to determine your loan servicer.
If you do not know who your loan servicer is, you can contact the Federal Student Loan Information Center at
1-800-433-3243
Once you know your loan servicer, proceed to the loan servicer’s website and setup an account. From there you can begin making payments. Note that you will only have a loan servicer assigned in the year after a loan has been disbursed. When you decide to begin making payments, you may find you have multiple loans at different interest rates. You will have the ability to assign extra money above the minimum payment to specific loans, namely the loans with the highest interest rates.
If no payments are due, you can assign the full amount of the payment to whichever loan you choose. Be sure to take advantage of this option which will help you shorten the duration of the payments. Once you have determined who services your loan, you can reach out to them to setup your account. See the following table for a list of how to contact your loan servicer.
| Loan Servicer | Website | Phone |
|---|---|---|
| CornerStone | https://www.mycornerstoneloan.org/ | 1-800-663-1662 |
| FedLoan Servicing (PHEAA) | https://myfedloan.org/ | 1-800-699-2908 |
| Granite State (GSMR) | https://gsmr.org/ | 1-888-556-0022 |
| Great Lakes Educational Loan Services, Inc. | https://www.mygreatlakes.org/ | 1-800-236-4300 |
| HESC/Edfinancial | https://edfinancial.com/ | 1-855-337-6884 |
| MOHELA | https://www.mohela.com/ | 1-888-866-4352 |
| Navient | https://navient.com/loan-customers | 1-800-722-1300 |
| Nelnet | https://www.nelnet.com/ | 1-888-486-4722 |
| OSLA Servicing | https://public.osla.org/ | 1-866-264-9762 |
| ECSI | https://efpls.ed.gov/ | 1-866-313-3797 |
| Default Resolution Group (also known as Maximus Federal Services, Inc.) | https://myeddebt.ed.gov/ | 1-800-621-3115 (TTY: 1-877-825-9923 for the deaf or hard of hearing) |
