Current Federal Student Loan Interest Rates
The current interest rate for federal undergraduate student loans is 4.99% for the 2025-26 award year. Graduate and professional PLUS loans carry a rate of 7.54%, while Graduate PLUS borrowers can access a lower 6.54% rate under certain conditions. These rates are set annually by Congress and apply to loans disbursed between July 1, 2025, and June 30, 2026.
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Federal student loan rates are fixed, meaning they do not change over the life of the loan. The rate is determined each year based on the 10-year Treasury note auction held in May, plus a statutory add-on. Because rates reset every award year, a borrower who takes out loans in 2025-26 will have a different rate than someone who borrowed in 2024-25.
Private Student Loan Rates
Private student loan interest rates vary by lender and borrower creditworthiness. As of mid-2025, fixed-rate private loans generally range from about 4.5% to 15%, while variable-rate loans can start lower but fluctuate with market conditions. Borrowers should compare offers from multiple lenders and pay attention to whether the rate is fixed or variable before signing.
How Rates Affect Repayment
Interest accrues daily on most student loans, which means the longer a loan remains unpaid, the more interest accumulates. For subsidized federal loans, the government covers interest while the borrower is in school at least half-time; for unsubsidized loans, interest begins accruing at disbursement. Understanding the current rate helps borrowers estimate total repayment costs and choose the right repayment plan.
| Loan Type | 2025-26 Interest Rate | Rate Type |
|---|---|---|
| Undergraduate Direct Subsidized/Unsubsidized | 4.99% | Fixed |
| Graduate Direct Unsubsidized | 6.54% | Fixed |
| Graduate PLUS | 7.54% | Fixed |
| Private Loans (Typical Range) | 4.5% – 15% | Fixed or Variable |
Staying Updated on Rate Changes
Congress sets federal student loan rates each year as part of the higher education funding process. Rates can shift based on Treasury yields and legislative action. Borrowers should check the Federal Student Aid website or their loan servicer for the most current rate information before accepting a new loan offer.