Interest Rates and Origination Fees
Interest rates on Federal Direct Loans are set according to a formula based on an auction of 10- year Treasury notes under section 455(b)(7) of the Higher Education Act (HEA).
On May 12, 2026, the Treasury Department held a 10-year Treasury note auction that resulted in a high yield of 4.47%. Each rate is the sum of this index plus an add-on that varies depending on the type of loan and whether the borrower is an undergraduate or graduate/professional student.
Interest Rates
| Loan Type | Borrower Type | Index 10-year Treasury note |
Add-on | Fixed Interest Rate |
|---|---|---|---|---|
| Direct Subsidized Loans |
Undergraduate Students | 4.47% | 2.05% | 6.52% |
| Direct Unsubsidized Loans |
Undergraduate Students | 4.47% | 2.05% | 6.52% |
| Direct Unsubsidized Loans |
Graduate/Professional Students |
4.47% | 3.60% | 8.07% |
| Direct PLUS Loans | Parents of Dependent Undergraduate Students and Graduate/Professional Students |
4.47% | 4.60% | 9.07% |
Origination Fees
The following origination fees apply to any loan disbursement for a loan where the first disbursement is/will be on or after October 1, 2020, and before October 1, 2026.
| Loan Type | Origination Fee |
|---|---|
| Direct Subsidized Loans | 1.057% |
| Direct Unsubsidized Loans | 1.057% |
| Direct PLUS Loans | 4.228% |