Sec. 201. Applicable rates of interest for loans made on or after July 1, 2024
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Section 455(b)(8) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(b)(8) ) is amended— in the paragraph heading, by inserting after and before July 1, 2024 ; July 1, 2013 in subparagraph (A), by inserting and before July 1, 2024 after July 1, 2013 ; in subparagraph (B), by inserting and before July 1, 2024 after July 1, 2013 ; in subparagraph (C), by inserting and before July 1, 2024 after July 1, 2013 ; in subparagraph (D), by inserting and before July 1, 2024 after July 1, 2013 ; by redesignating subparagraph
(F)as subparagraph (G); and by inserting after subparagraph
(E)the following: Notwithstanding the preceding subparagraphs of this paragraph, for Federal Direct Unsubsidized Stafford Loans, Federal Direct PLUS Loans, and Federal Direct Consolidation Loans for which the first disbursement is made, or the application is received, on or after July 1, 2024, the applicable rate of interest shall be as follows: For a loan that is disbursed to a borrower with a total adjusted available income (as determined for the most recent award year for which data is available) that is not more than 400 percent of the applicable area median income, 0 percent on the unpaid principal balance of the loan. For a loan that is disbursed to a borrower with a total adjusted available income (as determined for the most recent award year for which data is available) that is more than 400 percent of the applicable area median income, but not more than 500 percent of such applicable median income, 1 percent on the unpaid principal balance of the loan. For a loan that is disbursed to a borrower with a total adjusted available income (as determined for the most recent award year for which data is available) that is more than 500 percent of the applicable area median income, but not more than 600 percent of such applicable median income, 2 percent on the unpaid principal balance of the loan. For a loan that is disbursed to a borrower with a total adjusted available income (as determined for the most recent award year for which data is available) that is more than 600 percent of the applicable area median income, but not more than 700 percent of such applicable median income, 3 percent on the unpaid principal balance of the loan. For a loan that is disbursed to a borrower with a total adjusted available income (as determined for the most recent award year for which data is available) that is more than 700 percent of the applicable area median income, 4 percent on the unpaid principal balance of the loan. The term applicable area median income — when used with respect to an independent student, means the area median income for the area in which the student resides; and when used with respect to a dependent student, means— except as otherwise specified in items
(bb)through (ee), the area median income for the area in which the parents of the student reside; in a case in which the parents of the student are divorced or living in different areas, the area median income for the area of the parent who provides the greater portion of the student’s financial support, as determined based on criteria described in section 475(f); in a case in which one parent has died, the area median income for the area of the surviving parent; in a case in which both parents have died, the area median income for the area in which the student resides; and in a case in which a parent has remarried, the location of that parent's spouse (if different from the location of the remarried parent) has no impact on the determination of area median income under this subclause. The term area median income means the median family income for an area, as determined for purposes of the United States Housing Act of 1937 ( 42 U.S.C. 1437 et seq. ). The term total adjusted available income , for purposes of award year 2024–2025, and each subsequent award year— when used with respect to a dependent student, means the amount equal to, with respect to such student, the sum of— the assessment of parents’ adjusted available income computed under section 475(b)(1); the student’s total income (determined in accordance with section 480); and the student’s assets computed under section 475(h); when used with respect to an independent student without dependents, means the amount equal to, with respect to such student, the sum of— the family’s available income computed under section 476(b)(1)(A); and the family’s available assets computed under section 476(c)(1); and when used with respect to an independent student with dependents, means the amount equal to, with respect to such student, the adjusted available income computed under section 477(a)(1)(A). .
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Sec. 201
Applicable rates of interest for loans made on or after July 1, 2024
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