Current Federal Student Loan Interest Rates
Compare out Rates to Federal Student Loan Rates.
Understanding Federal Student Loan Rates for 2024-2025
Federal student loan interest rates are determined annually based on the 10-year Treasury note auction results, plus a fixed margin. This approach ensures that the rates reflect the government's cost of borrowing, albeit with an added percentage to cover administrative costs and mitigate risk. The rates are fixed for the life of the loan, providing predictability for borrowers. Each year, the new rates take effect on July 1 and apply only to loans disbursed for the upcoming academic year, not affecting the rates of existing loans.
Uptick in Student Loan Rates
For the academic year 2024-2025, we're seeing a significant update to the interest rates on federal student loans. Here's a breakdown of what's coming:
Undergraduate Federal Direct Stafford Loans will now carry an interest rate of 6.533%, a leap from the previous 5.5%.
Graduate Federal Direct Stafford Loans see an increase to 8.083%, up from 7.05%.
Parent PLUS and Grad PLUS Loans will be set at 9.083%, which is higher than the former rate of 8.05%.
The increase in federal student loan interest rates for the 2024-2025 academic year will inevitably compound the financial strain on students and families already navigating the challenges of higher education costs. With rates climbing across all loan categories, borrowers will face higher monthly repayments and an increased total cost of borrowing over the lifetime of their loans. This uptick could deter prospective students from enrolling in higher education programs, exacerbate the debt burden on graduates, and potentially influence career choices as individuals may prioritize high-paying roles to manage their loan repayments.
7.95% Fixed Interest Rate
8.34% to 8.87% APR*
*Rates vary based on number of months to graduation at funding date, NOT your credit score.
Updated July 2nd, 2023
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