New rates for student loans start this week.

Here’s what you need to know — and what it means for your student loans.

Student loans

Student loans are more expensive starting July 1, 2022. That’s bad news for student borrowers who have already faced high inflation on everything from groceries to gas. With the uncertainty surrounding student loan forgiveness and the pause in student loan payments, there is no doubt that student borrowers are feeling the student loan blues. Here are the new student loan interest rates for new federal student loans:

Undergraduate student loans (subsidized and unsubsidized)

  • New price: 4.99%
  • Current rate: 3.73%

Graduate student loans (unsubsidized)

  • New price: 6.54%
  • Current rate: 5.28%


Parent PLUS Loans and Grad PLUS Loans (PLUS Loans)

  • New price: 7.54%
  • Current rate: 6.28%

Student Loans: FAQs

Why will student loans have higher rates?

Student loan rates are rising. Each May, Congress sets federal student loan interest rates for the academic year based on an auction of 10-year Treasury bills. As the Federal Reserve raised interest rates to control inflation, consumer debt became more expensive.


How much more expensive will student loans get?

Interest rates on student loans will increase by 1.26 percentage points. As a percentage, however, the increase is significant:

Undergraduate student loans: 33.8%

Graduate Student Loans: 23.9%

Direct PLUS Loans: 20.1%


Do these higher interest rates affect my student loans?

It depends on whether you have existing student loans or are planning to take out new student loans. If you have existing federal student loans, your interest rate will not change. Why? Federal student loans have fixed interest rates, which means the interest rate will not change. That said, if you borrow a new federal student loan, you will pay the new interest rate. In contrast, private loans are available from private lenders and can have variable or fixed interest rates. Variable rates may change monthly, for example, when the underlying interest rates change. If you’re not sure what student loans you have, contact your student loan officer to determine if your interest rates will change.


Will my student loan be fixed or variable?

These new interest rates apply only to federal student loans, which have fixed interest rates. Currently, the federal government only offers fixed interest rate loans.


How to get a lower interest rate on your student loans

Student loan refinancing is the best way to get a lower interest rate on your student loans. Refinancing can help you save money, pay off your student loans faster, and get out of debt.

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

In addition to a lower interest rate, you can choose a fixed or variable interest rate and a student loan repayment term of 5 to 20 years.

To refinance your student loans, you will need a credit score of at least 650, be employed or have a job offer, have a stable monthly income, and have monthly cash flow to pay your student loans and other living expenses. If you are looking for government loan forgiveness or need an income-driven repayment plan, for example, federal student loan refinancing is not recommended (but you should refinance your private loans) . If you can’t be approved on your own, apply with a qualified co-signer who can help you get approved and get a lower interest rate.


Student Loans: Related Reading

9 million borrowers are now eligible for student loan forgiveness

Senators propose major changes to student loan forgiveness

How to qualify for $6 billion in student loan forgiveness

Department of Education Announces Major Overhaul of Student Loans Service