- Among all existing borrowers, 6.87% is the average student loan interest rate.
- For new undergraduate loans, the current federal interest rate is 5.50%.
- All federal loan interest rates were temporarily set to 0% from March 13, 2020, until September 1st, 2023.
- 94.81% of all student loan debt is federal.
- Current refinancing rates from private lenders range from 3.99% to 13.99% for fixed APR, and 5.24% to 13.99% for variable APR.
| Student Borrowers | Loan Type | Interest Rate |
|---|---|---|
| Undergraduate | Direct | 5.50% |
| Graduate & Professional | Direct | 7.05% |
| Parent, Graduate & Professional | PLUS | 8.05% |
Student Loan Interest Rates
Student loan interest rates were at historic lows for the 2020-2021 academic year in response to the ever-ballooning national student debt, which was labeled a crisis as early as 1995.
- 6.87% is the average student loan interest rate among all student loans, federal and private.
- Between 2022-23 and 2023-24, all federal student loan interest rates rose an average of 8.02%.
- Interest rates for undergraduate loans rose 56% slower than interest rates for graduate and professional students.
- The undergraduate federal interest rate has declined by 60.7% since rates peaked at 14% in the early 1980s.
- Consolidating federal loans does not decrease interest rates, but refinancing may.
Federal Interest Rates
94.81% of all student loan debt is federal. Federal loan interest rates are fixed, meaning the interest rate stays the same as long as there is an outstanding balance on the loan.
- The interest rate among all federal student loans increased by 8.02% – up from 6.36% – between the 2022-2023 and 2023-2024 academic years.
- The average federal loan interest rate since 2006 is 5.99%.
- The undergraduate interest rate is 5.50%.
- The current undergraduate interest rate is up 10.2% YoY.
- Over the past 5 years, the average interest rate for undergraduate student loans has been 4.30%.
- Federal interest rates are adjusted every year on July 1st.
- The interest rate for a Direct Consolidation Loan is determined by the weighted average of the consolidated loans’ interest rates rounded up to the nearest one-eighth of 1%.
| Disbursement Period | Interest Rate |
|---|---|
| 7/2023-6/2024 | 5.50% |
| 7/2022-6/2023 | 4.99% |
| 7/2021-6/2022 | 3.73% |
| 7/2020-6/2021 | 2.75% |
| 7/2019-6/2020 | 4.53% |
| 7/2018-6/2019 | 5.05% |
| 7/2017-6/2018 | 4.45% |
| 7/2016-6/2017 | 3.76% |
| 7/2015-6/2016 | 4.29% |
| 7/2014-6/2015 | 4.66% |
| 7/2013-6/2014 | 3.86% |
Historical Federal Interest Rates
While the earliest federal student loan programs date to 1944, they were only available to military veterans until 1958.
- In 1982, federal interest rates ran as high as 14%.
- In 1987, undergraduates could get loans at an interest rate of 12%.
- In 1992, federal interest rates ran from 9% to 11%.
- Federal interest rates fell by an average of 39.2% between 2010 and 2021.
- The average federal loan interest rate has declined by 4.19% since 2006.
- Federal interest rates for undergraduates have declined 19.1% since 2006, an annual rate of 1.27%.
- From 2006 until 2012, the fixed interest rate for Direct Unsubsidized Loans for undergraduates was 6.80%.
- From 2006 until 2012, the fixed interest rate for graduate and professional students was 6.8%.
- As of July 1, 2012, graduate and professional students are no longer eligible for subsidized loans.
- Starting with the 2013-2014 academic year, Undergraduate Direct Loans carry the same interest rate whether they are subsidized or unsubsidized.
- Also starting in 2013, interest rates adjust annually.
- Prior to the 2013-2014 academic year, interest rates were generally higher and didn’t always change from year to year.
| Disbursement Period | Interest Rate |
|---|---|
| 7/2011-6/2013 | 3.4% |
| 7/2010-6/2011 | 4.5% |
| 7/2009-6/2010 | 5.6% |
| 7/2008-6/2009 | 6.0% |
| 7/2006-6/2008 | 6.8% |
Graduate, Professional, & Parent Rates
Interest rates for parents and graduate students haven’t fallen as quickly as loans for undergraduates.
- Direct loans for graduate and professional students rose by 23.1% in the last year.
- PLUS loans for parents and for graduate and professional students have increased by 6.76%.
- Between the 2019-2020 and 2020-2021 academic years, interest rates for these loans saw their largest ever year-over-year declines.
- Graduate and Professional direct loan interest rates are increasing 126% faster than those for undergraduate loans.
- PLUS loan interest rates have increased 33.8% slower than those for undergraduates.
- The now-defunct Federal Family Education Loan Program (FFEL) had a fixed interest rate of 8.50% for parents, graduates, and professional borrowers, just until 2010.
| Disbursement Period | Interest Rate |
|---|---|
| 7/2023-6/2024 | 7.05% |
| 7/2022-6/2023 | 6.54% |
| 7/2021-6/2022 | 5.28% |
| 7/2020-6/2021 | 4.30% |
| 7/2019-6/2020 | 6.08% |
| 7/2018-6/2019 | 6.60% |
| 7/2017-6/2018 | 6.00% |
| 7/2016-6/2017 | 5.31% |
| 7/2015-6/2016 | 5.84% |
| 7/2014-6/2015 | 6.21% |
| 7/2013-6/2014 | 5.41% |
| 7/2006-6/2013 | 6.80% |
| Disbursement Period | Interest Rate |
|---|---|
| 7/2023-6/2024 | 8.05% |
| 7/2022-6/2023 | 7.54% |
| 7/2021-6/2022 | 6.28% |
| 7/2020-6/2021 | 5.30% |
| 7/2019-6/2020 | 7.08% |
| 7/2018-6/2019 | 7.60% |
| 7/2017-6/2018 | 7.00% |
| 7/2016-6/2017 | 6.31% |
| 7/2015-6/2016 | 6.84% |
| 7/2014-6/2015 | 7.21% |
| 7/2013-6/2014 | 6.41% |
| 7/2006-6/2013 | 7.90% |
Private Loan Interest Rates
Private lenders have started to implement strategies similar to federal relief in order to keep default rates at historic lows; the current private loan default rate is 2%.
- Official report estimates for the overall average private student loan interest rate generally range from 4.5% to 16.99%.
- Among major private lenders, 17.99% is the highest annual percentage rate (APR).
- The lowest available APR among private lenders is 4.13% (including an auto-pay discount).
Refinance Loan Interest Rates
Federal and private student loans can only be refinanced through private lenders.
- One study found that if every eligible borrower refinanced their loans, the national average interest rate would drop to 4.2%.
- 52.8% of borrowers are eligible for refinancing.
For more information, see our report on Student Loan Refinancing.
Sources
- New America, In the Interest of Few
- U.S. Department of Education (ED) Office of Federal Student Aid (OFSA), Federal Interest Rates and Fees
- PR Newswire, Latest MeasureOne Private Student Loan Report Finds Pandemic-Related Forbearance
- Bankrate, Current Student Loan Interest Rates
- COVID-19 Emergency Relief and Federal Student Aid
- Student Loan Debt Statistics In 2023 | Bankrate
- Private Student Loans: Compare Top Lenders | February 2024
- What’s the interest rate on a Direct Consolidation Loan? | Federal Student Aid
- Historical Federal Student Loan Interest Rates and Fees