🔔Count Adjustment Consolidation Deadline Extended to April 30, 2024 🔔Review the Student Aid IDR Account Adjustment page for more info...

Student Loan Types and Interest

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 2022-2023 academic year:

Federal Student Loan Types and Limits:

Loan Type

Interest Rate



Loan Limits

IDR Eligible

Direct Grad PLUS
(interest accrues during school***)




Up to Cost of Attendance (COA)


Direct Unsubsidized
(interest accrues during school***)




$40,500 for 9-month term
$47,167 for 12-month term*


Health Professions Student Loan (HPSL), Perkins Loans, Loans for Disadvantaged Students (LDS) 
(subsidized - no interest accrual during school)





If Consolidated

IDR = income-driven repayment
* U.S. students 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.
*** Direct Loans do not accrue interest during the special pandemic forbearance period, in place from March 13, 2020 through at least August 31, 2022.

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.  New disbursements will be available only if the program is reinstated by Congress.
  • 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 prior to July 1st each year. While student loan interest rates change each year, the rate remains fixed for the life of the loan.

For Example:
Federal Direct Student Loans 2022-2023 Interest Rates
Effective for Loans First Disbursed on or after July 1, 2022 and prior to July 1, 2023

Loan Type

Borrower Type

10-Year Treasury Note


Fixed Interest Rate

Direct Unsubsidized Loans

Graduate/Professional Students




Direct PLUS Loans

Graduate/Professional Students




10-Year Treasury Note Source: https://www.treasurydirect.gov/instit/annceresult/press/preanre/2022/R_20220511_2.pdf

For a list of interest rates in past academic years, review a list of student loan interest rates prior to July 1, 2021.

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 calculation. The interest rate on your loans is divided by the number of days in the year to get a daily interest rate factor.  

Most loan servicers use the following daily interest rate factor calculation:

daily interest rate factor= interest rate ÷ 365.25 (number of days in a year)

In-school Interest

While you are in school, calculate the interest accumulation for each of your Direct Unsubsidized and 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.

In–school Interest Projection = Principal balance × Daily interest rate factor × number of days between loan disbursement and your graduation date***

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 found on the VIN Foundation blog.

Login to STUDENTAID.GOV each semester and upload your MyStudentData download file to the VIN Foundation My Student Loans tool to see an estimate of the interest accumulation each month.  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.

Analyzing your student loan costs together with your personal budget 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. Generally, you have 120 days from the disbursement date 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 disbursed.  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.

For example, let’s consider two veterinary students starting at Colorado State University in Fall 2021, borrowing the cost of attendance (COA). Knowing the predominant student loan types and interest rates, we can calculate the interest that will accrue during school and until graduation using the VIN Foundation In-School Loan Estimator:  

Colorado State student starting 2021 Direct Unsubsidized loan for first-year Direct Grad Plus loan for first-year Interest on first-year loans through graduation (~ 5/15/2025) Total cost of first-year loan
Resident COA = $59,757

8/23/2021: $20,250 @ 5.28%

1/16/2022: $20,250 @ 5.28%

8/23/2021: $9,629 @ 6.28%

1/16/2022: $9,628 @ 6.28%

$15,660 a $75,417
Non-resident COA = $84,385

8/23/2021: $20,250 @ 5.28%

1/16/2022: $20,250 @ 5.28%

8/23/2021: $21,943 @ 6.28%

1/16/2022: $21,942 @ 6.28%

$22,895 a $107,280

a Accounts for pandemic forberance interest waiver through 1/31/2022

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.

Average interest accumulation per month = Principal balance × Daily interest rate factor × 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:

Loan Number


Interest Rate

Interest Accumulation per year

Loan 1




Loan 2




Loan 3




Sum of loans




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, provided all interest rate data is available in your student aid data file.

Scroll to top