Since most Stafford Loans have a three to four percent origination fee, a typical $10,000 Stafford Loan may cost the student up to $400 for the privilege of borrowing the money, in addition to the finance charge. Even with the new lower interest rate, once a four percent fee is added to the original loan amount, students could end up paying a huge percent more than they borrowed.
The following example is based on a "subsidized" Stafford Loan. If the loan is
unsubsidized, the total cost and payments will be even greater. Interest on unsubsidized loans must be paid quarterly
or added to the total cost of the loan at graduation. Stafford and PLUS interest rates change every July 1st. For a look at loan comparisons and updated interest rates, click on: College Loans
TOTAL
INTEREST & FEES FOR SUBSIDIZED
STAFFORD
LOAN INCLUDING ORIGINATION FEES |
| Plan |
Loan |
Interest* |
Mo. Pmts. |
Actual Payback |
Percentile ‡ |
| 10 yr. |
$10,000 |
5.99% |
$111 |
$13,716 |
37% |
| 15 yr. |
$10,000 |
5.99% |
$84 |
$15,580 |
56% |
| 20 yr. |
$10,000 |
5.99% |
$71 |
$17,580 |
76% |
| 10 yr. |
$15,000 |
5.99% |
$166 |
$20,575 |
37% |
| 15 yr. |
$15,000 |
5.99% |
$127 |
$23,370 |
56% |
| 20 yr. |
$15,000 |
5.99% |
$107 |
$26,371 |
76% |
*
Rates change annually. Maximum allowable is 8.25% plus origination fee.
‡Payback and percentile figures rounded and includes 4% origination fee.
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