College Loan Interest Rate

A huge part of understanding college loans is getting to know the college loan interest rates that you face. Each loan has its own rate and the can vary greatly depending on the lender, the program and the amount needed.

Understanding college financial aid can be a fairly huge task. There seems to be a whole language geared to the simple issue of funding your higher education. As you work on your financial aid package, you inevitably come upon the loan section so you need to have a decent understanding of loans. You should know how they work and what benefits they are to your education.

Loan Interest Rates Basics
Interest rates on federal loans for education are based on the “91-day” interest rate from the US Treasury. It changes each year on July 1st after having been set during the Treasury auction in May of the current year. One form of federal aid is based on this and is actually known as the 91-day or 13-week T-Bill.

The interest rates on federal college loans tend to be considerably smaller than on any other loan in the market. You can find private loans that are in completion with the federal standard, but you will not find one with a better interest rate or an easier loan approval process.