Here are the new prices

Student loans will become more expensive this year. Here are the new prices.

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

Student loans

Bad news for student borrowers: Federal student loan interest rates are increasing significantly over the next academic year beginning July 1, 2022. Here are the new student loan interest rates:

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: questions and answers

Why are student loans getting more expensive?

Each May, Congress sets federal student loan interest rates for the upcoming school year based on an auction of 10-year Treasury bills. The Federal Reserve has raised interest rates this year to help control inflation. Rising interest rates have increased the cost of consumer debt.


When will these student loan interest rates take effect?

These new interest rates are in effect from July 1, 2022 to June 30, 2023.


What student loans does this affect?

The new interest rates apply to Federal Undergraduate Student Loans (subsidized and unsubsidized), Graduate Student Loans (unsubsidized), and Direct PLUS Loans (including Parent PLUS Loans and PLUS Loans for graduate or professional diplomas) borrowed after July 1, 2022.


How much will interest rates on student loans go up?

Interest rates on student loans will increase by 1.26%. As a percentage, however, this increase in interest rates is substantial:

Undergraduate student loans: 33.8%

Graduate Student Loans: 23.9%

Direct PLUS Loans: 20.1%


Does this increase affect my student loans?

If you have existing federal student loans, there will be no impact on your interest rate. This is because federal student loans have a fixed interest rate that will not change for the life of your student loan. However, if you borrow new federal student loans after July 1, 2022, your new federal student loans will have a higher interest rate.


Do these new interest rates affect my private student loans?

No, these new student loan interest rates only apply to federal student loans. The federal government determines the interest rates for federal student loans. In contrast, private lenders determine the interest rates for private loans. While federal student loans have fixed interest rates, private loans can have a fixed or variable interest rate. You should check with your lender to determine if your private loans will have a higher interest rate.


Are these new student loan interest rates fixed or variable?

These new interest rates are fixed interest rates. Why? All federal student loans have fixed interest rates, which means your interest rate on your federal student loan will never change, no matter what happens to the underlying interest rates.


Can I borrow student loans now to get a lower interest rate?

You can’t borrow new federal student loans for the upcoming school year until July 1, 2022. Unfortunately, you won’t be able to get a lower interest rate on a new federal student loan before that date.


How to Lower Your Student Loan Interest Rates

Student loan refinancing is the best way to reduce the interest rate on your student loans. Refinancing can help you save money, pay off your student loans faster, and get out of debt. You can refinance private or federal student loans, or both.

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

When you refinance student loans, you get a new student loan with a lower interest rate and one monthly payment. Choose a fixed or variable interest rate and a student loan repayment term of 5 to 20 years.

For 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 need income-driven repayment plans, are looking for government loan forgiveness (or similar federal benefits or programs), refinancing federal student loans is not recommended (but you should refinance your private loans). If you don’t meet the refinance requirements, you can apply to a qualified co-signer who can help you get approved and get a lower interest rate. Some lenders will release the co-signer after your approval and meet certain requirements.


Student Loans: Related Reading

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Biden confirms he won’t forgive $50,000 in student loans – 5 key takeaways

Student loan forgiveness: 5 key takeaways from a major announcement

Student loan forgiveness: Who might qualify for Biden’s plan

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