Med Student · Investing & Retirement
Debt vs. investing starts with the loan rate
2 min read
Before choosing between extra debt payments and investing, identify the fixed loan rate and the federal rules attached to that loan.
LOANS FIRST DISBURSED JUL 1, 2026–JUN 30, 2027
8.07%Direct Unsubsidized · graduate/professional
9.07%Direct PLUS · parent and graduate/professional
6.52%Undergraduate Direct · reference
The One Big Beautiful Bill Act enacted federal lending caps for new borrowers, ended Grad PLUS for new borrowers and created a Repayment Assistance Plan for new borrowers beginning July 1, 2026. Undergraduate subsidized loans were left unchanged — graduate and professional students lost Direct Subsidized eligibility on July 1, 2012, under the Budget Control Act of 2011.
Your next steps
- Find each loan’s fixed rate and first-disbursement date.
- Separate federal loan rules from investment-return assumptions.
- Verify which post–July 1 rules apply to your borrower status.
Check your understanding
Select each question to reveal the answer.
✓ The loan’s 8% cost is certain; the investment’s 8% is only an expectation — and loan interest accrues no matter what the market does.
✓ The loan’s first-disbursement date.
✓ No. Borrower status and timing matter.
✓ No. The loan rate is fixed; investment returns are uncertain.
Planning questions
- What are the rate, balance, and first-disbursement date for each of your federal loans?
- Which repayment or forgiveness rules apply to your borrower status before you direct extra cash?