As of August 13, 2026, the current interest rate for federal student loans depends on the loan type and when you borrow. For undergraduate Direct Subsidized and Unsubsidized Loans disbursed between July 1, 2026, and June 30, 2027, the interest rate is 6.53%. Graduate students borrowing Direct Unsubsidized Loans will see a rate of 8.08%, and parents or graduate students taking out Direct PLUS Loans will have a rate of 9.08%. These rates are fixed for the life of the loan, so they will not change over time.
How Federal Student Loan Rates Are Set
Federal student loan interest rates are set by Congress and are tied to the yield of the 10-year Treasury note. The rate is recalculated each year for loans disbursed from July 1 through June 30 of the following year. The rates for the 2026-27 award year were determined based on a Treasury auction held in May 2026.
Because rates are fixed, your interest rate will stay the same for the entire repayment period. However, if you borrow in different award years, each loan may have a different rate. That means you could have multiple federal loans with different interest rates.
Current Rates for the 2026-27 Award Year
The table below shows the current interest rates for federal student loans disbursed on or after July 1, 2026, and before July 1, 2027. These rates apply to new loans, not existing ones.
| Loan Type | Borrower | Interest Rate |
|---|---|---|
| Direct Subsidized Loan | Undergraduate | 6.53% |
| Direct Unsubsidized Loan | Undergraduate | 6.53% |
| Direct Unsubsidized Loan | Graduate or Professional | 8.08% |
| Direct PLUS Loan (Parent or Grad) | Parent of dependent undergraduate, or graduate/professional | 9.08% |
These rates are fixed for the life of the loan. For comparison, the rates for the 2025-26 award year were 5.99% for undergraduate loans, 7.54% for graduate unsubsidized loans, and 8.54% for PLUS loans. The increase reflects changes in the broader economy and Treasury yields.
What This Means for Borrowers
Higher interest rates mean higher monthly payments and more total interest over the life of the loan. For example, a $10,000 undergraduate loan at 6.53% over 10 years would result in a monthly payment of about $113 and total interest of about $3,560. The same loan at the previous 5.99% rate would have a monthly payment of about $111 and total interest of about $3,330.
Tips to Reduce the Impact of Higher Rates
- Borrow only what you need. Calculate your actual education costs and reduce the loan amount whenever possible.
- Make interest payments while in school. For unsubsidized loans, interest accrues during school; paying it early prevents it from being capitalized (added to your principal).
- Consider a federal work-study job. Earn money to cover expenses without borrowing more.
- Explore scholarships and grants. These do not need to be repaid and can reduce your reliance on loans.
- Choose a repayment plan that fits your budget. Income-driven repayment plans can lower monthly payments, though you may pay more interest over time.
What About Existing Loans?
If you already have federal student loans from previous years, your interest rate is locked in and will not change. For example, if you borrowed an undergraduate loan in 2025-26 at 5.99%, that rate remains for that loan’s entire repayment term. New loans you take out this year will have the new 6.53% rate.
If you have multiple loans with different rates, you might consider consolidating them through a federal Direct Consolidation Loan. However, consolidation combines your loans into a new loan with a weighted average interest rate rounded up to the nearest one-eighth of a percent. This may not lower your rate, but it can simplify payments and give you access to additional repayment plans.
How to Find Your Exact Rate
Your exact interest rate is listed on your loan disclosure statement, which you receive before the loan is disbursed. You can also view your rates by logging into your account on the Federal Student Aid website. The National Student Loan Data System (NSLDS) shows all your federal loans and their interest rates.
If you have private student loans, their rates are set by the lender and may be variable or fixed. Federal loans generally offer more flexible repayment options and protections, so it is wise to exhaust federal aid before turning to private loans.
Looking Ahead
Interest rates for federal student loans are updated each year. The rates for the 2027-28 award year will be set in May 2027 and will apply to loans disbursed from July 1, 2027, through June 30, 2028. While no one can predict future rates, keeping an eye on Treasury yields can give you a rough idea of where rates might head.
If you are considering borrowing for the upcoming school year, it is important to compare your options and borrow responsibly. Even small differences in interest rates can add up to significant amounts over time.
In summary, the current interest rate for federal student loans for the 2026-27 award year is 6.53% for undergraduate loans, 8.08% for graduate unsubsidized loans, and 9.08% for PLUS loans. These fixed rates apply to new loans disbursed between July 1, 2026, and June 30, 2027. Always check your loan disclosure statement for your exact rate, and consider ways to minimize borrowing and interest costs.
Frequently Asked Questions
What is the current interest rate for federal student loans for undergraduates?
For loans disbursed between July 1, 2026, and June 30, 2027, the interest rate for undergraduate Direct Subsidized and Unsubsidized Loans is 6.53%.
Do federal student loan interest rates change every year?
Yes, rates are set each year based on the 10-year Treasury note auction in May, and they apply to loans disbursed from July 1 to June 30 of the following year.
Are federal student loan interest rates fixed or variable?
All federal student loans made on or after July 1, 2006, have fixed interest rates, meaning the rate stays the same for the entire life of the loan.
How can I find the interest rate on my existing federal student loans?
You can log in to your Federal Student Aid account or check the National Student Loan Data System (NSLDS) to see the interest rate for each of your federal loans.
Will my interest rate change if I consolidate my federal loans?
Consolidation creates a new loan with a weighted average of your existing rates, rounded up to the nearest one-eighth of a percent, so the rate may be slightly higher but not lower.
