Fed Stafford Student Loans and Federal Reserve Interest Rate!?

The interest rate on Federal Stafford Student Loan has jumped from around 3% to 6.8% in summer of 2006. The federal reserve interest rate around th same period has been going up very rapidly up to that period. http://money.cnn.com/2005/09/20/news/eco...

I am just curious if the Stafford Loans interest jump had something to do with the performance of the U.S. economy. Now, with the current weak U.S. dollar, the Federal Reserve is likely to cut interest rates on September 18th (current rate is 5.25%). If the federal reserve keeps cutting the interest rate to prevent economic pain, can educational loans like Stafford Loans be cut-back?

Just wondering. :)

Fed Stafford Student Loans and Federal Reserve Interest Rate!?

Student loan interest rates can possibly change July 1 of every year. The loans that are at 6.8% however were taken out at fixed rates, so no, those will never change. And they didn't jump from 3 to 6%, they went from 5.14 to 7.22% on existing loans when you are in repayment.

It is based on the 91-Day Treasury Bill, so whatever it is that determines that rate is what determines the student loan rate. But no loans (no matter if the T-Bill rate goes down or not) will change interest rates before 7/1/08.

Fed Stafford Student Loans and Federal Reserve Interest Rate!?

Here is the Dept of Education publication on student loans. The interest rates for the different loans are printed on a chart in the back.