Student loans can be both a significant aid as well as a financial drain for the future. If you are a parent of a student or a student yourself, you should be aware of this update regarding student loan rates. The U.S. Treasury recently announced that interest rates on new federal student loans have decreased again for the 2016/2017 school year.

Every year, thousands of students and their parents take out federal student loans to help pay for college or graduate school. The interest rates on federal student loans are fixed for the life of the loan but reset each year on July 1 for new loans. Again, this year there’s good news for students and parents applying for new loans.

Loan Types and Their New Rates

Rates on new federal student loans issued during the academic year July 1, 2016, through June 30, 2017 have decreased from the 2015/2016 rates. Here are the details:

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Subsidized vs. Unsubsidized

What’s the difference between these two types of student loans? With a subsidized loan, the federal government pays the interest while the student is in school, during the six-month grace period after graduation, and during any loan deferment periods. In contrast, with unsubsidized loans, the borrower pays the interest during these periods. Eligibility for subsidized loans is based on financial need. Only undergraduate students are eligible for subsidized loans.

If you have any questions or concerns about student loans, interest rates, and how they will affect your future, get the conversation started with us at Mason & Associates. Your first meeting is always complimentary and commitment-free. Give our office a call at (323) 254-3072 or email us at This email address is being protected from spambots. You need JavaScript enabled to view it. .

About Brent

Brent M. Mason is the President of Mason & Associates, Inc.  Brent began his career in 1999 with Putnam Investments, where he was a vice president and served as the marketing manager for Putnam’s Insurance Products Division, specializing in the development and sale of investment vehicles within insurance related products. Brent earned a Bachelor’s Degree in Business Administration from Southern Methodist University, in Dallas, Texas where he focused on marketing and finance. Brent is a licensed California insurance agent and can offer life, health, variable and long-term care insurance products. Currently, he is a member of the Board of Directors at Hillsides, an organization that specializes in meeting the needs of at-risk children in the greater Los Angeles area. Brent lives in Pasadena with his wife Leah and their three beautiful children. He enjoys golf, snow skiing and spending time with family and friends.