For borrowers asking what is the interest rate on student loans, the answer depends on whether the debt comes from the federal government or a private lender. For the 2026–27 academic year, new federal student loan rates range from 6.52% to 9.07%, while private student loan rates vary considerably based on the lender, the borrower’s credit profile, repayment term and whether the loan carries a fixed or variable rate.
The interest rate is one of the most important numbers to examine before taking out education debt. It determines how quickly interest accumulates and can have a major effect on the total amount repaid over the life of a loan.
Current Federal Student Loan Interest Rates for 2026–27
Federal student loan rates for loans first disbursed between July 1, 2026, and June 30, 2027, are fixed for the life of the loan.
The current rates are:
| Federal loan type | 2026–27 interest rate |
|---|---|
| Direct Subsidized Loans for undergraduate students | 6.52% |
| Direct Unsubsidized Loans for undergraduate students | 6.52% |
| Direct Unsubsidized Loans for graduate and professional students | 8.07% |
| Direct PLUS Loans for parents and graduate or professional students | 9.07% |
These rates apply to new loans issued during the specified federal loan year. They do not automatically replace the interest rate on older federal student loans.
For example, an undergraduate who borrowed a federal Direct Loan during the 2025–26 academic year generally keeps the rate assigned to that loan rather than moving to the 2026–27 rate.
Why Federal Student Loan Rates Differ
Federal student loan interest rates are determined under a formula established by federal law. The formula uses a benchmark tied to the 10-year Treasury note and adds a statutory percentage depending on the type of federal loan.
As a result, rates can change from one academic year to another.
The 2026–27 undergraduate rate of 6.52% is slightly higher than the 6.39% rate that applied to undergraduate federal Direct Loans during 2025–26. Graduate Direct Unsubsidized Loans increased from 7.94% to 8.07%, while PLUS loan rates increased from 8.94% to 9.07%.
Once a federal loan is issued, however, its fixed interest rate generally remains unchanged for the life of that loan.
Undergraduate Student Loan Rates
Undergraduate students who qualify for federal Direct Subsidized or Direct Unsubsidized Loans face a 6.52% fixed interest rate on loans first disbursed during the 2026–27 academic year.
The two loan types have the same stated interest rate, but they differ in how interest is treated.
With a Direct Subsidized Loan, eligible borrowers generally are not responsible for interest that accrues during certain qualifying periods, including while they are enrolled at least half-time. The government covers qualifying interest during those periods under federal rules.
With an unsubsidized loan, the borrower is responsible for interest that accumulates from the time the loan is disbursed. Interest can therefore build while the student is still attending school.
That difference can affect the eventual balance even when the two loans carry exactly the same interest rate.
Graduate Student Loan Rates
Graduate and professional students face a higher federal rate.
For the 2026–27 academic year, Direct Unsubsidized Loans for graduate and professional students carry a fixed interest rate of 8.07%.
Unlike eligible undergraduate borrowers, graduate and professional students do not receive new Direct Subsidized Loans. As a result, students pursuing advanced degrees need to pay particular attention to how much they borrow and how long they expect to remain in repayment.
Graduate education can involve several years of borrowing. When loans accumulate across multiple academic years, each year’s balance can have its own interest rate.
Parent PLUS and Other PLUS Loans
Direct PLUS Loans carry the highest standard federal student loan rate for the 2026–27 academic year.
The rate is 9.07% for Parent PLUS Loans and eligible graduate or professional PLUS borrowing.
PLUS loans can help cover education expenses that are not met through other forms of financial aid, but the higher interest rate can make them more expensive than undergraduate Direct Loans.
Borrowers should also account for applicable loan fees when calculating the actual cost of borrowing.
Private Student Loan Interest Rates in 2026
Private student loans work differently from federal loans because banks, credit unions and other private lenders determine their own pricing.
During September 2026, marketplace rates for private student loans are showing a very broad range. One major marketplace currently reports fixed private student loan rates from about 1.94% to 17.99%, while variable rates range from about 3.50% to 17.99%.
Those figures represent advertised marketplace ranges rather than rates that every borrower will receive.
A borrower with strong credit, steady income and a qualified co-signer may receive a substantially lower rate than someone with limited credit history or a weaker credit profile.
Private lenders can consider factors such as:
- Credit history
- Credit score
- Income
- Existing debt
- Employment
- School and degree program
- Loan amount
- Repayment period
- Co-signer qualifications
Because underwriting standards differ, two borrowers applying for similar loan amounts may receive very different offers.
Fixed vs. Variable Student Loan Rates
Borrowers should determine whether a private loan has a fixed or variable interest rate before accepting an offer.
A fixed-rate loan keeps the same interest rate throughout the repayment period, assuming the borrower remains under the original loan agreement.
A variable-rate loan can change over time. The rate is generally tied to a market benchmark, with the lender adding a margin. When the benchmark changes, the borrower’s interest rate can also change.
Variable loans sometimes advertise lower starting rates, but the initial rate does not guarantee the rate that will apply several years later.
For borrowers who want predictable monthly payments, a fixed rate provides greater certainty. Those considering a variable rate should understand how often the rate can change, whether there is a maximum rate and how a change could affect the monthly payment.
How Much Does a 6.52% Student Loan Cost?
Consider a hypothetical borrower with $30,000 in federal student loan debt at a fixed 6.52% rate.
Using a standard 10-year amortization calculation, the principal-and-interest payment would be approximately $341 per month. Over 120 payments, the total amount repaid would be substantially higher than the original $30,000 because the borrower is paying interest over the repayment period.
The actual payment for a federal borrower can differ because federal repayment plans have different formulas and eligibility requirements.
The example illustrates an important point: the interest rate cannot be considered separately from the loan balance and repayment period.
A $10,000 balance at the same rate has a very different cost from a $60,000 balance.
How Student Loan Interest Accrues
Federal Direct Loans generally accrue interest daily.
A simplified calculation can illustrate how this works. If a borrower has a $20,000 balance at 6.52%, dividing the annual rate by 365 gives an approximate daily rate.
The resulting daily interest amount is roughly $3.57 when the full $20,000 principal remains outstanding.
Actual interest calculations can vary because balances change as payments are made, and specific federal rules determine how interest is handled.
For unsubsidized loans, interest can also accumulate while the borrower is in school. If unpaid interest is added to the principal under applicable capitalization rules, the borrower may subsequently pay interest on a larger balance.
Do Existing Student Loans Get the New 2026 Rate?
Not necessarily.
The new federal rates apply to loans first disbursed during the applicable 2026–27 period. Older federal loans generally retain the fixed rate assigned when they were first disbursed.
This means a borrower with multiple federal loans can have several different interest rates at the same time.
For instance, someone who attended college over several years may have one loan with a rate established in 2023, another from 2024 and another from 2026.
Borrowers should review their individual loan records rather than assuming every loan carries the latest published rate.
What Happens When Interest Rates Are High?
Higher interest rates increase the cost of borrowing, particularly when balances are large.
A borrower with a $50,000 balance will generally accumulate more interest each year than someone with a $10,000 balance at the same rate.
A higher rate can also make it harder for payments to reduce principal quickly. Early in a long repayment schedule, a larger portion of a payment can go toward accrued interest before the remaining amount is applied to principal.
This is one reason borrowers should consider the total cost of a loan rather than focusing only on the advertised monthly payment.
Ways to Reduce Student Loan Interest Costs
Borrowers have several strategies available to potentially reduce interest expenses.
Borrow Less
The simplest approach is to avoid borrowing more than necessary. Grants, scholarships, savings, employer assistance and other non-loan resources can reduce the amount that must be financed.
Make Voluntary Payments During School
For unsubsidized loans, interest generally accrues while the student is enrolled. If financially possible, making payments toward accrued interest during school can help prevent the balance from growing.
Even modest payments can make a difference over a long repayment period.
Pay More Than the Required Amount
Extra payments can reduce principal faster, which can reduce the amount of future interest.
Borrowers should make sure their loan servicer applies additional payments according to their instructions and confirms how payments are allocated.
Use Available Automatic Payment Discounts
Some federal loan servicers and private lenders offer interest-rate reductions for eligible borrowers who enroll in automatic payments.
The exact discount and eligibility rules vary, so borrowers should review the current terms of their loan and servicer.
Compare Private Loan Offers
Someone who needs private financing should compare multiple offers rather than accepting the first approval.
Important factors include the APR, interest rate, fees, repayment period, grace period, deferment provisions, co-signer requirements and co-signer release policies.
Should You Choose a Federal or Private Student Loan?
Federal and private loans have different structures and protections.
Federal loans generally provide standardized terms and may offer repayment programs and other federal protections that are unavailable with private loans.
Private loans can be useful when federal aid does not cover the full cost of attendance, but terms depend on the lender and the borrower’s qualifications.
For that reason, students should understand the differences before using private debt to fill a college funding gap.
Borrowers considering refinancing federal loans into private loans should also carefully examine what federal benefits they could lose after refinancing.
What Is the Interest Rate on Student Loans Compared With Previous Years?
Federal student loan rates have moved considerably over the past several years.
The undergraduate federal rate was 2.75% during the 2020–21 academic year, but rates subsequently increased. The undergraduate rate reached 6.53% for 2024–25 before moving to 6.39% for 2025–26 and 6.52% for 2026–27.
The history shows why borrowers should distinguish between the rate on an existing loan and the rate being announced for new loans.
A borrower with an older federal loan may have a significantly different rate from someone starting college during the 2026–27 academic year.
What Borrowers Should Check Before Signing
Before accepting a student loan, borrowers should review more than the headline interest rate.
Check the:
- Interest rate
- APR
- Fixed or variable structure
- Origination fees
- Repayment term
- Monthly payment estimate
- Total projected repayment
- Grace period
- Deferment and forbearance provisions
- Available repayment options
- Co-signer requirements
- Co-signer release conditions
A loan with a slightly lower rate may not necessarily have the lowest overall cost if it carries higher fees or less favorable repayment terms.
Final Takeaway
Student loan rates in 2026 depend heavily on the source and type of borrowing. New federal Direct Loans for undergraduate students carry a 6.52% fixed rate for the 2026–27 academic year, while graduate and professional Direct Unsubsidized Loans carry 8.07%. Parent and eligible graduate PLUS loans carry a 9.07% fixed rate.
Private loans operate under a different system, with rates determined by individual lenders and borrower qualifications. Current marketplace offers span a much wider range than federal loans, making comparison particularly important.
Anyone researching what is the interest rate on student loans should look at the specific loan type, disbursement year, repayment term and total borrowing cost. The rate is only one part of the financial picture, but it can have a significant effect on how much a borrower ultimately pays for a college education.
For borrowers planning to take on new debt, understanding the rate before signing the loan agreement can make it easier to estimate future payments, compare financing options and avoid taking on more debt than necessary.