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Interest Rates on New Federal Student Loans Will Reach Record Highs in July
Last week, the U.S. Department of the Treasury released its annual auction results that will impact the interest levels borrowers pay on new federal student loans. For the fourth consecutive year, interest rates are increasing — and are the highest rates documented for undergraduate and graduate student loans in over a decade.
Since 2013, the interest rates for federal student loans have been determined based on market conditions. The U.S. Department of Education revises its annual interest rates according to the 10-year Treasury note auction plus a fixed percentage that varies by loan type (e.g., Subsidized Stafford, Unsubsidized Stafford, PLUS).
The results of last week’s 10-year Treasury note auction will mean an increase of more than one percentage point for federal student loans disbursed on or after July 1, 2024 and before June 30, 2025. The interest rates are fixed for the life of the loan.
The table below demonstrates the consistent increase in federal student loan interest levels, showing rates by loan type for the academic years 2020-21 through 2024-25.
| Loan Type | 2020-21 | 2021-22 | 2022-23 | 2023-24 | 2024-25 |
|---|---|---|---|---|---|
| Direct Subsidized (Undergraduate) | 2.75% | 3.73% | 4.99% | 5.50% | 6.53% |
| Direct Unsubsidized (Undergraduate) | 2.75% | 3.73% | 4.99% | 5.50% | 6.53% |
| Direct Unsubsidized (Graduate) | 4.30% | 5.28% | 6.54% | 7.05% | 8.08% |
| Direct PLUS (Graduate and Parent) | 5.30% | 6.28% | 7.54% | 8.05% | 9.08% |
| Direct Subsidized (Undergraduate) Loans | |
|---|---|
| Year | Interest Rate |
| 2020-21 | 2.75% |
| 2021-22 | 3.73% |
| 2022-23 | 4.99% |
| 2023-24 | 5.50% |
| 2020-25 | 6.53% |
| Direct Unsubsidized (Undergraduate) Loans | |
|---|---|
| Year | Interest Rate |
| 2020-21 | 2.75% |
| 2021-22 | 3.73% |
| 2022-23 | 4.99% |
| 2023-24 | 5.50% |
| 2020-25 | 6.53% |
| Direct Unsubsidized (Graduate) Loans | |
|---|---|
| Year | Interest Rate |
| 2020-21 | 4.30% |
| 2021-22 | 5.28% |
| 2022-23 | 6.54% |
| 2023-24 | 7.05% |
| 2020-25 | 8.08% |
| Direct PLUS (Graduate and Parent) Loans | |
|---|---|
| Year | Interest Rate |
| 2020-21 | 5.30% |
| 2021-22 | 6.28% |
| 2022-23 | 7.54% |
| 2023-24 | 8.05% |
| 2020-25 | 9.08% |
If you have questions about your student loans, set up a free coaching call with AccessLex Accredited Financial Counselors through AccessConnex by AccessLex℠.