How Changes to Federal Student Loan Rates Impact You
The House approved the Senate’s student loan bill yesterday. This bill included some significant changes to how interest rates are set on loans made after July 1, 2013. Here is how it impacts you.
If you already graduated:
If you already graduated, it doesn’t. The new rates don’t apply to federal student loans, including Grad PLUS and Consolidation loans made before July 1, 2013. If you have existing federal student loans, you should consider refinancing your undergrad unsubsidized and graduate loans with SoFi. You’ll probably get a lower rate, consolidate lots of payments into one, and benefit from our community (what other lender helps you get a job or gives you access to its investor community through an entrepreneur program. Our fixed rates start at 5.49% APR (with ACH payments)–which are very competitive with Direct loans to grad students and PLUS loans.
If you are an undergrad:
If you are an undergrad student in school, your federal loan rates for this year are fixed at 3.9%. That’s a good deal – better than SoFi can offer. You should take that loan. If your parents are borrowing through Parent PLUS, their rate is 6.4% but their APR is 6.94% (based on our estimates) because of the 4.2% origination fee. In this case, you should consider a SoFi fixed rate loan where your parents are the primary borrower and you are a co-signer. Same value proposition as above: lower rates, one payment and a community that delivers real value to you.
If you are a graduate student:
If you are a graduate student in school, your loan rates for this year are fixed at 5.4% for your Direct Unsubsidized loans, and 6.4% for your PLUS loans. However, you are still paying 1.1% and 4.2% origination fees, respectively, so your true rates (annual percentage rates) are up to 6.94% for those loans (based on SoFi’s assumptions for a typical MBA student). If you fall into this bucket, you might want to consider SoFi’s fixed rate as an alternative to PLUS borrowing. Same value proposition as above: lower rates, one payment and a community that delivers real value to you.
We are thrilled to see the cost of student loans drop, and we will continue to innovate and bring better products to market to lower debt burdens and increase community engagement.
If you’d like a free consultation to see how much SoFi could save you, call us at 1-866-357-6342.