; plus (2) for the portion of the principal amount of the loan that exceeds the maximum annual amount a student may borrow under subsection (c)(1), as authorized by subsection (c)(2), 4.0 percent of such portion of the principal amount of the loan. (e) Interest rates (1) Undergraduate students With respect to IDEA Loans made to undergraduate students for which the first disbursement is made on or after July 1, 2018, the applicable rate of interest shall, during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding June 1 and be equal to the lesser of— (A) a rate equal to the high yield of the 10-year Treasury note auctioned at the final auction held prior to such June 1, plus 2.05 percent; or (B) 8.25 percent. (2) Graduate and professional students With respect to IDEA Loans made to graduate or professional students for which the first disbursement is made on or after July 1, 2018, the applicable rate of interest shall, during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding June 1 and be equal to the lesser of— (A) the rate determined under paragraph (1)(A), except that 3.6 percent shall be substituted for 2.05 percent in such determination