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Current Student Loan Interest Rates and How They Work
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Eliza Haverstock
Lead Writer- Student loan repayment
- paying for college
Karen Gaudette Brewer
Lead Assigning Editor- Core Personal Finance
Lisa Mulka
WriterThe federal student loan interest rate for undergraduates is 6.53% for new loans taken out for the 2024-25 school year, effective from July 1, 2024, to June 30, 2025. Federal rates for graduate student loans and PLUS loans are higher — 8.08% and 9.08%, respectively. These rates are the highest they've been in at least 16 years.
Private student loan interest rates can sometimes be lower than federal rates, but approval for the lowest rates requires excellent credit (scores above 689). Private loans originate from banks, credit unions or schools instead of the federal government. Private loans are best used to fill funding gaps after maxing out federal loans.
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Current student loan interest rates
Fixed | 3.95% to 9.99% | |
Variable | 4.86% to 9.99% | |
Fixed | 3.47% to 17.99% | |
Variable | 4.81% to 23.0% | |
Federal student loans (fixed) | ||
Undergraduate | 6.53% | |
Graduate | 8.08% | |
PLUS (Parent, Grad) | 9.08% | |
Any student, regardless of their financial need, typically qualifies for unsubsidized student loans, and students with a financial need may qualify for subsidized loans.
Subsidized loans are a better deal because the government pays the interest that accrues while you’re in school. All federal student loans have fixed interest rates, which means the interest rate does not change during the life of the loan.
In addition to interest rates, federal student loans also come with fees. These fees are taken as a percentage of the total loan amount and deducted proportionally from each loan disbursement, meaning you'll receive slightly less than the amount you borrow.
Student loan rates over time:
Academic year | Unsubsized Undergraduate | Unsubsized Graduate | Parent PLUS, Grad PLUS |
|---|---|---|---|
2024-25 | 6.53% | 8.08% | 9.08% |
2023-24 | 5.50% | 7.05% | 8.05% |
2022-23 | 4.99% | 6.54% | 7.54% |
2021-22 | 3.73% | 5.28% | 6.28% |
2020-21 | 2.75% | 4.30% | 5.30% |
2019-20 | 4.53% | 6.08% | 7.08% |
2018-19 | 5.05% | 6.60% | 7.60% |
2017-18 | 4.45% | 6.00% | 7.00% |
2016-17 | 3.76% | 5.31% | 6.31% |
2015-16 | 4.29% | 5.84% | 6.84% |
2014-15 | 4.66% | 6.21% | 7.21% |
Source: U.S. Department of Education, Federal Student Aid Interest rates effective July 1 of each year.
It’s generally best to max out your federal student loan options before taking out a private student loan. If you need one, shop around first to ensure you get the lowest rate you qualify for. If you don’t meet a lender’s credit requirements, you can apply with a co-signer who does.
Private loans can have fixed or variable interest rates. Variable interest rates can change monthly, quarterly or annually depending on the loan contract. Fixed interest is the safer option because you don’t have to worry about your rate — and payment — increasing.
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