Sec. 401. Interest rate provisions for new Federal student loans on or after July 1, 2023
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Section 455(b) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(b) ) is amended— in paragraph (8)— in the paragraph heading, by inserting ; and and before July 1, 2023 by inserting and before July 1, 2023, after July 1, 2013, each place it appears; by redesignating paragraphs
(9)and
(10)as paragraphs
(10)and (11), respectively; and by inserting after paragraph
(8)the following new paragraph: Notwithstanding the preceding paragraphs of this subsection, for Federal Direct Stafford Loans, Federal Direct Unsubsidized Stafford Loans, and Federal Direct PLUS Loans, for which the first disbursement is made on or after July 1, 2023, the applicable rate of interest shall, for loans disbursed during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding June 1 and be equal to the lesser of— a rate equal to the high yield of the 10-year Treasury note auctioned at the final auction held prior to such June 1; or 5.0 percent. Notwithstanding the preceding paragraphs of this subsection, any Federal Direct Consolidation Loan for which the application is received on or after July 1, 2023, shall— bear interest at an annual rate on the unpaid principal balance of the loan that is equal to the lesser of— the weighted average of the interest rates on the loans consolidated, rounded to the nearest higher one-eighth of one percent; or 5.0 percent; and only accrue interest on the percentage of such Federal Direct Consolidation Loan that is equal to— the amount of the sum of the unpaid principal on the loans consolidated; divided by the total amount of such Federal Direct Consolidation Loan. The Secretary shall determine the applicable rate of interest under this paragraph after consultation with the Secretary of the Treasury and shall publish such rate in the Federal Register as soon as practicable after the date of determination. The applicable rate of interest determined under this paragraph for a Federal Direct Stafford Loan, a Federal Direct Unsubsidized Stafford Loan, a Federal Direct PLUS Loan, or a Federal Direct Consolidation Loan shall be fixed for the period of the loan. .
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Sec. 401
Interest rate provisions for new Federal student loans on or after July 1, 2023
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