Student Loan Rates Rising Today – Here’s Why and What to Do


Student loan rates will increase from today.

Here’s what you need to know – And what to do about it.

Student loans

Student loans are about to get more expensive for the next school year. Here are the new rates for any federal student loan borrowed after July 1, 2021:

Undergraduate student loans (subsidized and unsubsidized)

  • Current rate: 2.75%
  • New price: 3.73%

Graduate student loans (unsubsidized)

  • Current rate: 4.30%
  • New price: 5.28%

Parent PLUS Loans and Grad PLUS Loans (PLUS Loans)

  • Current rate: 5.30%
  • New price: 6.28%

Why are student loans more expensive? Each May, Congress sets federal student loan interest rates for the upcoming school year on the basis of a 10-year treasury bill auction. The new interest rates are effective July 1, 2021 through June 30, 2022, and the interest rates will be 0.98% (percentage points) higher. Unlike last year, when student loan rates fell, student loans will become more expensive for all student loan borrowers who borrow federal student loans for the upcoming school year.

Student loans: questions and answers

What student loans does this affect?

The new interest rates apply to undergraduate student loans (both subsidized and unsubsidized), graduate student loans (unsubsidized) and Direct PLUS loans (including Parent PLUS loans and PLUS loans for graduate or professional degrees such as law, business, medicine or dentistry, for example).

Does this affect my student loans?

If you have student loans, the new rates will not affect your existing federal student loans. If you borrow new student loans, you will pay the highest interest rate on those new student loans.

Do these interest rates apply to private student loans?

No, these student loan interest rates only apply to federal student loans. Private loans have separate interest rates, which are set by the lender you are borrowing from. It is important to check if your private loans have a variable interest rate. If so, your student loan interest rate on your existing student loans could change (increase or decrease) as interest rates change.

Are these new student loan interest rates fixed or variable?

All federal student loans are fixed interest rate loans. This means that no matter what happens to the interest rates, your interest rate will not change.

Can I borrow a student loan now to get the lowest interest rates?

Unfortunately, you can’t borrow new federal student loans for the next school year until July 1, 2021 to get a lower interest rate. So if you are borrowing student loans, you will need to borrow after July 1.

My student loans are currently on hold. Does this affect me?

Federal student loan payments are currently on hold until September 30, 2021 due to a temporary student loan forbearance. Interest rates on federal student loans are temporarily set at 0%. However, this student loan relief only applies to outstanding student loans. This interest rate increase applies to new student loans borrowed. If this student loan relief expires, your federal student loan payments and your regular interest rate will resume as of October 1, 2021. President Joe Biden may extend this student loan relief beyond September 30, but in the absence of an extension, you should expect to restart student loan repayment on October 1.

How can I get a lower interest rate on my student loans?

Refinancing a student loan is the best way to get a lower interest rate on your student loans, whether federal or private. Currently, student loan refinance rates are at an all-time low, which means you may be getting an interest rate that is lower than your current rate. It can help you save money, pay off your student loans faster, and get out of debt. You can refinance federal student loans, private student loans, or both. You can also refinance undergraduate, graduate, PLUS, and Parent PLUS loans. When you refinance a student loan, you get a new, unique student loan with a lower interest rate and one monthly payment. You can choose a fixed or variable interest rate as well as a student loan repayment term of 5 to 20 years.

AT refinance your student loans, you will need a good to strong credit score (usually 650 or higher), have a job or have a job offer, have a stable monthly income and have monthly cash flow to pay off your student loans and other day-to-day expenses. The good news is that you can apply online and there are several lenders to choose from. If you’re struggling to repay your student loans, need income-driven repayment plans, or want to apply for a civil service loan forgiveness (or similar program), Federal Student Loan Refinance No is not recommended. If you don’t meet the requirements, you can apply with a qualified co-signer who can help you get approval and get a lower interest rate. Some lenders allow you to release the co-signer once you are approved and meet certain conditions.

This student loan refinance calculator shows you how much money you can save by refinancing a student loan.

Student loans: related reading

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