Lower the low cost charge (the rate on federal loans) - This frees up cash for banks which might be borrowing cash from the Fed. Lower the federal funds price - This frees up extra money for banks, allowing them to supply more engaging loans. Federal Student Aid Collections. The lending banks charge curiosity on these loans, at a set rate referred to as the federal funds fee. The curiosity charge, additionally referred to as the coupon, is usually larger with long-term bonds. Easy finance, low ...