Student Loan Types and Interest

The predominant federal student loan types available for graduate/professional school (i.e. veterinary school) are Direct Unsubsidized and Direct PLUS loans. The following table illustrates the various loan types currently available during the 2024-2025 academic year:

Federal Student Loan Types and Limits:

IDR = income-driven repayment
*Students eligible for U.S. student loans who attend foreign veterinary schools can only receive $20,500 per year maximum Direct Unsubsidized loans.
** Check with your school for availability, amounts available, and application requirements.

There are currently only three types of school-dependent federal student loans available to graduate school students that do not accumulate interest during school:

• Health Professions Student Loans (HPSL)
• Perkins Loans The Federal Perkins loan program expired on September 30, 2017.
• Loans for Disadvantaged Students (LDS)

These loans are inconsistently available depending on the school you attend and your individual circumstances. Check with your school financial aid office to see if you might be eligible for these types of loans. HPSL and LDS are types of federal student loans that can be consolidated into a Direct Consolidation Loan after school to include in an income-driven repayment plan.  If HPSL or LDS are not consolidated, they can only be paid using a time-driven repayment plan.

Federal Student Loan Interest

While you are in school, Direct Unsubsidized and Direct Grad PLUS loans accumulate interest daily starting from the date you receive each loan (disbursement date). The interest rate is determined by the type of loan and your disbursement date and the amount you receive is net of loan origination fees charged to you at the time of disbursement.

Direct Loan interest rates are based on the high yield of the 10-year Treasury note auctioned just before July 1st each year (usually late May or early June). While student loan interest rates change each year, the rate remains fixed for the life of the loan.

For Example:
Federal Direct Student Loans 2024-2025 Interest Rates
Effective for Loans First Disbursed on or after July 1, 2024 and prior to July 1, 2025

10-Year Treasury Note Source: https://www.treasurydirect.gov/instit/annceresult/press/preanre/2024/R_20240508_2.pdf

For a list of interest rates in past academic years, review a list of student loan interest rates prior to July 1, 2023.

For a recent history of common veterinary school student loan interest rates, review the VIN Foundation blog post on student loan interest rates.

Daily Interest Rate Factor

Federal student loan interest is calculated using a “simple daily interest" formula. The interest rate on your loans is divided by the number of days in the year to get a daily interest rate factor.  

No payments are due while in school. Review the VIN Foundation Borrow Better resources before making payments to interest during school. Review the VIN Foundation Repay Wiser resources between making extra payments to your student loans after school during repayment.

In-school Interest

During school, calculate the interest accumulation for each of your Direct Unsubsidized and Grad PLUS loans by counting the days between each loan disbursement date and graduation date. Multiply that number of days by the daily interest rate factor to estimate your in-school interest for each loan.

Login to STUDENTAID.GOV each semester after receiving your loans and upload your MyStudentData download file to the VIN Foundation My Student Loans tool to see an estimate of your monthly interest accumulation. To estimate your total costs as a student, send your data from My Student Loans to the In-School Loan Estimator or start a new estimation from scratch if you do not yet have student loans.

In-School Loan Estimator

• Edit your graduation date (take your best guess if you’re not sure)
• Adjust your remaining years to borrow
• Enter the amounts you expect to borrow for your remaining years in school
• Click the Generate Loan Details button
• Review your In-School Loan Estimation Results
• Click the "Save/Share" button to share a unique link to your estimation in the Student Debt Message Board if you have questions about anything you're seeing

Review the following two In-School Loan Estimation examples for an in-state and out-of-state Ohio State University veterinary student starting class in Fall 2024 and graduating May 2028:

• In-State OSU CVM student, borrowing the full Cost of Attendance (COA) using U.S. student loans with a 2.7% tuition and fees increase per year with no change in estimated living expenses: https://www.vin.com/studentdebtcenter/default.aspx?pId=14352&id=8696383#kkcgeWrelmgfPz7N/l52CQ==
• Out-of-State OSU CVM student, borrowing the full COA using U.S. student loans with a 2.7% tuition and fees increase per year with no change in estimated living expenses: https://www.vin.com/studentdebtcenter/default.aspx?pId=14352&id=8696383#OulCQKZ687I0ONqmtPJ5PQ==

Using your personal budget, the school's COA and your in-school loan estimation will help you understand how much financial aid you need each semester and if there is an opportunity to reduce or return unused funds or reduce future award amounts. You have 120 days from the day you receive your loans to return unused/excess award amounts. If you return funds within that 120-day window, you will not be charged the interest or fees associated with the amount returned. After 120 days, you will be responsible for all interest and fees associated with your loan disbursement. Borrowing less and returning unused or excess student loan amounts are much less expensive than paying your loans during school.

IMPORTANT NOTE: Don't forget to add interest that accrues during your grace period which can add another 180 days (6 months) of interest.  You can reduce the impact of your grace period interest by using a Federal Direct Consolidation loan to end your grace period early ("Do Not Delay Processing") and apply for repayment before your grace period ends.  Review the New Veterinary Graduate Student Loan Repayment Playbook on the VIN Foundation blog.

Interest during student loan repayment

Multiply the daily interest rate factor by the average days per month and by your principal balance (disbursed amounts) to get the average interest accumulation per month.  

The amount of interest you owe per month depends on the number of days that occur between payments, generally between 28 and 31 days when you’re in repayment. To figure out an average monthly interest accrual, take the number of days per year and divide by twelve months (365.25 ÷ 12 = 30.4) to get the average days per month.

Weighted Average Interest Rate

The weighted average interest rate is a measure to help you apply a single average measure to your multi-loan portfolio. The weighted average will account for differences in interest rates and principal balances. To calculate a weighted average rate, sum the annual interest accumulation for each loan and divide by the total loan principal. For example:

Weighted Average Interest rate across Loans 1, 2 and 3 = $4,664.20 ÷ $75,500 = 6.18% 

Enter the weighted average interest rate into the VIN Foundation Student Loan Repayment Simulator when projecting your repayment costs. The VIN Foundation My Student Loans tool will help you calculate a weighted average interest rate for you.