Current interest rates for student loans

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Student loans can help bridge the gap between the total cost of a degree and the amount of financial aid your school offers. There are two main types of student loans: government loans with benefits and fixed interest rates that apply to all borrowers, and private loans with varying interest rates and terms.

You’re almost always better off with federal student loans because you’re likely to get a lower interest rate and they come with special benefits and protections. However, you can only refinance student loans through private lenders.

Interest rates for refinancing student loans

While interest rates have remained relatively tight in recent weeks, the cost of refinancing student loans has increased over the past year as Federal Reserve policymakers raised the benchmark interest rate to curb inflation. While not directly related to student loans, higher Fed interest rates ultimately affect the cost of borrowing on everything from college to real estate, credit cards and cars.

Student loans

Here is the current average interest rate for new variable student loans for students:

Graduate loans

Here is the current average interest rate for variable student loans for college graduates:

Private Student Loan Interest Rates vs. Federal Student Loan Interest Rates

Make sure you exhaust all of your federal student loan options before turning to a private lender. Federal student loans almost always have lower interest rates than private loans. Private loans require a credit check, and many students have either no credit history or a low credit score. This means they’ll likely be offered a higher interest rate than they’d pay on a federal student loan.

Congress sets interest rates on federal student loans, which are the same for all borrowers. There is no credit check required and you do not need to provide proof of income or have a co-signer. Federal student loans also offer some benefits, such as the ability to enter into an income-driven repayment plan, deferment, forbearance or forgiveness, that are not typically available with private loans.

Interest rates on federal student loans have also increased. Borrowing costs for all Department of Education loans are rising again for the 2023-2024 school year, after some rates saw their biggest increases in decades during the previous period. Although private lenders’ interest rates are not tied to federal loan rates, they will likely rise as well if federal loan rates rise because they don’t need to stay as low to remain competitive.

Federal student loan interest rates for the 2023-2024 school year

Source: US Department of Education

Frequently asked questions about refinancing student loans