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<strong>Fixed rate</strong> – An interest rate that is fixed at the time the loan is obtained (as opposed to a variable rate, which may change at specific times or based on specific indicators). As of July 1, 2006, interest rates on FFEL Program loans are fixed, replacing the variable rate loans that existed prior to that date.
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<strong>Accrued interest</strong> – Each day interest is calculated on the unpaid principal balance of a loan and increases (accrues). Interest accrues on a subsidized Stafford Loan after the grace period is completed and the borrower enters repayment. For unsubsidized Stafford, parent PLUS, and Grad PLUS Loans, on the other hand, interest begins to accrue after the first disbursement of the loan.
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