Current Student Loan Interest Rates and How They Work
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Learn more about private student loans
Find a student loan: Compare private student loans, types and rates
Pros and cons: How federal and private student loans differ
How to apply: Wondering where to apply for student loans first?
If you have begun repayment of your federal student loans, their interest rates have been set to 0% until Jan. 31, 2022, and no payment is due before then.
If you are still borrowing for your education, the federal student loan interest rate for undergraduates is 3.73% for the 2021-22 school year. Federal rates for unsubsidized graduate student loans and parent loans are higher — 5.28% and 6.28%, respectively. The rates for the coming year go into effect on July 1.
Private student loan interest rates can sometimes be lower than federal rates, but approval for the lowest rates requires excellent credit. If you have good credit, you may be able to refinance existing student loans to get a lower rate.
Current student loan interest rates
Fixed | 2.95% to 9.15% | |
Variable | 1.90% to 8.95% | |
Fixed | 3.34% to 14.99% | |
Variable | 1.04% to 12.94% | |
Undergraduate | 3.73% | |
Graduate | 5.28% | |
PLUS (Parent, Grad) | 6.28% | |
Rates updated monthly.
Federal student loan interest rates are increasing for the 2021-22 school year and apply to loans disbursed between July 1, 2021, and July 1, 2022. The interest rates for all new federal direct undergraduate student loans are 3.73%, up from 2.75% in 2020-21. Unsubsidized direct graduate student loan rates are 5.28%, up from 4.30%. Rates for PLUS loans, which are for graduate students and parents, are 6.28%, up from 5.30%.
Average student loan interest rate
The average student loan interest rate is 5.8% among all households with student debt, according to a 2017 report by New America, a nonprofit, nonpartisan think tank. That includes both federal and private student loans — about 90% of all student debt is federal.
With a 5.8% interest rate on $30,000 of student loans, a borrower would pay about $9,600 in interest throughout 10 years.
The average student loan interest rate is higher among some groups, according to the report. For instance, the average rate is 6.3% among households where the borrower didn’t complete a college degree, and 6.6% among households with incomes less than $24,000.
If you have multiple student loans with different rates, the weighted average interest rate is the rate you'll have if you consolidate the loans through the federal government. Federal consolidation won't lower your average interest rate, but refinancing with a private lender could.
Student loan interest rate calculator
How student loan interest rates work
Student loan interest rates work differently, depending on whether the loan is federal or private. For federal loans, every borrower taking out the same type of federal loan in a given year has the same interest rate. For private loans, borrowers with higher credit scores generally qualify for lower rates and borrowers with lower credit scores get higher rates.
Federal student loans:
Congress sets interest rates yearly based on the 10-year Treasury note
Most have fees charged as a percentage of the total loan amount
Rates are fixed for the life of the loan
Private student loans:
Interest rates are typically credit-based
Most private lenders don't charge origination fees
Borrowers can choose either a fixed or variable interest rate
Variable rates are subject to change monthly or quarterly
Key terms in this story
Fixed interest: An interest rate that does not change during the life of a loan. All federal student loans have fixed interest rates, but private loans can offer fixed or variable interest rates. Fixed interest is the safer option because you don’t have to worry about your rate — and payment — increasing.
Variable interest: Variable interest rates can change monthly or quarterly depending on the loan contract and come with rates caps as high as 25%. Variable interest loans are riskier than fixed interest loans, but can save you money if the timing is right.
Private student loan: Education funding from banks, credit unions and online lenders instead of the federal government. Private loans are best used to fill funding gaps after maxing out federal loans.
