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New Direct Loan Interest Rates Effective July 1, 2013
On August 9, Congress passed the Bipartisan Student Loan Certainty Act of 2013. This law sets new interest rates for federal student and parent loans disbursed after July 1, 2013. Please refer to the following website for information on new Direct Loan interest rates: http://studentaid.ed.gov/types/loans/interest-rates
Direct Loan Interest Rates and Changes to Student Eligibility for the Direct Subsidized Loans
On July 6, 2012, President Obama signed Public Law 112-141 that included a one-year extension of the 3.4 percent interest rate that has applied to Direct Subsidized Loans made to undergraduate students since July 1, 2011. With this action, the interest rate on any Direct Subsidized Loan first disbursed on or after July 1, 2012 and before July 1, 2013 will be 3.4 percent.
The 3.4 percent interest rate applies only to Direct Subsidized Loans made to undergraduate students. The interest rate on Direct Unsubsidized Loans made to both undergraduate and to graduate or professional students remains at 6.8 percent. As explained in an earlier announcement, graduate and professional students are not eligible for Direct Subsidized Loans for loan periods beginning on or after July 1, 2012.
Public Law 112-141 also includes a new limit on eligibility for Direct Subsidized Loans for new borrowers on or after July 1, 2013. A new borrower on or after July 1, 2013 will not be eligible for new Direct Subsidized Loans if the period during which the borrower has received such loans exceeds 150 percent of the published length of the borrower’s educational program. The law also provides that a borrower reaching the 150 percent limit becomes ineligible for interest subsidy benefits on all Direct Subsidized loans first disbursed to that borrower on or after July 1, 2013. We will provide further information on this as it becomes available.
Tax Benefits for Education Costs
"Attention college students and their parents: There are two tax credits offered for postsecondary education," Fox Business reports. "Money used toward tuition, course materials, fees, books, and equipment can be considered for either the American Opportunity Credit or the Lifetime Learning Credit. Money spent on room and board is not eligible for either tax credit. Almost every college, university, vocational school or other postsecondary institution eligible to participate in a student aid program administered by the Department of Education qualifies. Even some foreign schools qualify. In fact, the school should be able to tell you whether attendance at their institution makes you eligible to take either credit."