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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 as of July 1, 2022. That’s bad news for student loan borrowers who already have faced high inflation on everything from groceries to gas. With uncertainty around student loan forgiveness and the student loan payment pause, there’s no question why student loan 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 Rate: 4.99%
  • Current Rate: 3.73%

Graduate Student Loans (Unsubsidized)

  • New Rate: 6.54%
  • Current Rate: 5.28%

Parent PLUS Loans and Grad PLUS Loans (PLUS Loans)

  • New Rate: 7.54%
  • Current Rate: 6.28%

Student Loans: FAQ

Why will student loans have higher rates?

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

How much more expensive will student loans become?

Student loan interest rates will increase by 1.26 percentage points. On a percentage basis, 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 whether you have existing student loans or plan to borrower 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 through private lenders and may have variable or fixed interest rates. Variable rates can change each month, for example, as underlying interest rates change. If you’re unsure which student loans you have, contact your student loan servicer to determine if your interest rates will changes.


Will my student loan be fixed or variable?

These new interest rates are for federal student loans only, 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 student loans faster, and get out of debt.

This student loan refinancing calculator shows you how much money you can save through student loan refinancing.

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

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

Student Loans: Related Reading

9 million borrowers now qualify for student loan forgiveness

Senators propose major changes to student loan forgiveness

How to qualify for $6 billion of student loan forgiveness

Education Department announces major overhaul of student loan servicing


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