The longer the repayment period, the more expensive the loan becomes because you pay more in interest, however, the monthly payment is lower because you repay the loan over a longer time period. The rate paid by the government on its short term borrowing. The rate is reset periodically through public auctions. The T-bill rate is based on the quarterly average of 13 weekly auctions. If the borrower chooses not pay the interest, the lender may allow capitalization.
Unsubsidized loans are generally more expensive than subsidized loans.
The interest rate is based on an economic indicator usually the Prime rate or Treasury bill rate.