Interest rates for 2019-20 federal student loans are currently 4.53% for undergraduate loans, 6.08% for unsubsidized graduate loans, and 7.08% for direct loans MORE. With approximately 70% of students taking out student loans to attend college, in an environment of rising interest rates, it is important to understand how these loans can impact your finances. Read more to learn how federal student loan rates have changed over time and how they compare to private student lenders.
Interest Rates on Federal Student Loans: 2019-2020 School Year
Student loan interest rates will decrease for the 2019-2020 school year for all types of federal loans disbursed between July 1, 2019 and July 1, 2020. The disbursement date for any student loan is the date on which you receive payment from the lender. Below, we’ve listed current student loan rates on the types of federal loans available. Note that these percentages represent the amount of interest you will pay on an annual basis.
| Subsidized direct loans | First cycle | 4.53% | 1.059% |
| Direct unsubsidized loans | First cycle | 4.53% | 1.059% |
| Direct unsubsidized loans | Graduate or professional | 6.08% | 1.059% |
| Direct Loans PLUS | Parents, graduates or professionals | 7.08% | 4.236% |
Interest rates on student loans from 2006 to 2018
Over the past 12 years, interest on federal student loans has ranged from 3.4% to 7.90%, depending on the type of loan. Although these student loan rates have fluctuated over the years, they have been increasing since 2016. To see a visual representation of how student loan interest rates have changed over time, we have provided a graph that illustrates the rate model for three types of students. loans (direct subsidized, direct non-subsidized and direct PLUS) since 2006.
*Note that in the table above, we have not included historical rates for Stafford Loans or Federal PLUS Loans. Both loans were part of the Federal Family Education Loan Program (FFEL), which ended in 2010. However, we have included their historical rates from 2006 in our breakdown below.
Federal Direct Subsidized Loans
Although direct subsidized loans are only available to students with higher financial need, they are preferable to unsubsidized loans in two important ways: first, subsidized loans do not earn interest for the duration of your studies. Second, you get a six-month grace period after graduation before you have to start making payments for the student loan balance. However, interest rates for direct subsidized loans are the same as their unsubsidized counterparts.
Direct Subsidized Undergraduate Student Loans
| July 1, 2019-June 30, 2020 | 4.53% |
| July 1, 2018-June 30, 2019 | 5.05% |
| July 1, 2017-June 30, 2018 | 4.45% |
| July 1, 2016-June 30, 2017 | 3.76% |
| July 1, 2015-June 30, 2016 | 4.29% |
| July 1, 2014-June 30, 2015 | 4.66% |
| July 1, 2013-June 30, 2014 | 3.86% |
| July 1, 2011-June 30, 2013 | 3.40% |
| July 1, 2010-June 30, 2011 | 4.50% |
| July 1, 2009-June 30, 2010 | 5.60% |
| July 1, 2008-June 30, 2009 | 6.00% |
| July 1, 2006-June 30, 2008 | 6.80% |
Subsidized direct student loans for graduates
| July 1, 2006-June 30, 2012 | 6.80% |
Direct Unsubsidized Federal Loans
Direct unsubsidized student loans are easier to get than subsidized federal loans because you don’t need to prove your financial need. That being said, although the interest rates are the same, the terms of direct unsubsidized student loans are not as good. You will be responsible for paying any interest accrued on the loan during your study period. If you do not pay this interest during your studies, the total amount of interest payments will be added to the total amount of your loan.
Direct Unsubsidized Undergraduate Student Loans
| July 1, 2019-June 30, 2020 | 4.53% |
| July 1, 2018-June 30, 2019 | 5.05% |
| July 1, 2017-June 30, 2018 | 4.45% |
| July 1, 2016-June 30, 2017 | 3.76% |
| July 1, 2015-June 30, 2016 | 4.29% |
| July 1, 2014-June 30, 2015 | 4.66% |
| July 1, 2013-June 30, 2014 | 3.86% |
| July 1, 2006-June 30, 2013 | 6.80% |
Direct unsubsidized professional or graduate student loans
| July 1, 2019-June 30, 2020 | 6.08% |
| July 1, 2018-June 30, 2019 | 6.60% |
| July 1, 2017-June 30, 2018 | 6.00% |
| July 1, 2016-June 30, 2017 | 5.31% |
| July 1, 2015-June 30, 2016 | 5.84% |
| July 1, 2014-June 30, 2015 | 6.21% |
| July 1, 2013-June 30, 2014 | 5.41% |
| July 1, 2006-June 30, 2013 | 6.80% |
Federal Direct PLUS Loans
Direct PLUS student loans differ from other types of federal loans in that they target more graduate and professional students, in addition to parents who are helping their dependent children finance their education. While direct subsidized and unsubsidized student loans don’t take your credit history into account, if you’re looking to borrow a Direct PLUS loan, a bad credit history could mean you’re ineligible. Plus, Direct PLUS loan interest rates are higher than what you’ll see for other federal student loans.
Direct PLUS Student Loans
| July 1, 2019-June 30, 2020 | 7.08% |
| July 1, 2018-June 30, 2019 | 7.60% |
| July 1, 2017-June 30, 2018 | 7.00% |
| July 1, 2016-June 30, 2017 | 6.31% |
| July 1, 2015-June 30, 2016 | 6.84% |
| July 1, 2014-June 30, 2015 | 7.21% |
| July 1, 2013-June 30, 2014 | 6.41% |
| July 1, 2006-June 30, 2013 | 7.90% |
Federal Student Loans PLUS
| July 1, 2006-June 30, 2010 | 8.50% |
Private Student Loan Interest Rates
If you’re looking for the best student loans to fund your college education, we always recommend that you start by looking at federal student loans first. Federal loan types offer the same fixed interest rate for each borrower and offer multiple repayment plans, which are not usually offered by private lenders. However, if you have taken federal student loans before but still can’t afford the college of your dreams, it may be a good idea to look to private student lenders to supplement your federal loans.
With that in mind, interest rates on private student loans can vary widely from lender to lender and also fluctuate based on several other factors, such as your credit score. We’ve looked at five different private lenders to give you an idea of what your average student loan interest rate range might be on a private loan. Unlike federal student loans which have fixed rates, interest rates for private loans are set by the lender and can vary depending on a number of factors, including whether you have a co-signer and the amount borrowed.
Student Loan Refinance Rates
If you already have student loans and are looking for better rates, refinancing might be a good option for you. However, if you are considering refinancing your federal student loans, first consider the benefits you would be giving up, including income-driven repayment plans and student loan forgiveness. Still, you can explore student loan refinance lenders to see what would make the most sense for your student loans.
Keep in mind that interest rates are largely determined by your credit score, which indicates your ability to repay the loan. If your credit score is not very high, you will not qualify for the lowest rates available and should consider working to improve your credit score before applying or using a co-signer. Below we have listed some of the best student loan refinance lenders and their rates.
