Student-centric advice and objective recommendations
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Finding the Best Student Loan Interest Rates
Student loan interest rates are the portion of the student loan that is charged as interest to the borrower. A low interest rate means that you will be charged less money over the lifecycle of the student loan. Because of this, interest rates are a very important datapoint to keep track of since, over a long enough time frame, a slightly-lower interest rate will save you a lot of money!
Federal student loans include subsidized and unsubsidized Direct Student Loans and Direct PLUS Loans. If you are planning on taking out federal student loans, keep on reading to learn about the current interest rates!
Learn more: Best student loans for students
Federal student loan interest rates
Federal interest rates vary from year to year as they are set by the United States Department of Education.
The rates for student loan interest for the 2021-2022 academic year are:
| Loan | Borrower Type | Interest Rate |
| Direct Subsidized Loans and Direct Unsubsidized Loans | Undergraduate Students | 3.73% |
| Direct Unsubsidized Loans | Graduate or Professional Students | 5.28% |
| Direct PLUS Loans | Parents and Graduate or Professional Students | 6.28% |
Note that loans that are subsidized are loans that you are not responsible for paying interest on while you are pursuing your degree. Loans that are unsubsidized will accrue interest during your time in school.
Learn more: Subsidized vs. unsubsidized loans: What you need to know
You can find up-do-date information about federal rates on the Federal Student Aid website.
Private student loan interest rates
Interest rates of private student loans vary from lender to lender. Our suggestion is to always shop around to see the best rates. We suggest using a private student loan marketplace to get a sense of the variety of interest rates available to you.
Additionally, private student loan rates vary depending on whether your student loan is variable or fixed. Generally, variable interest rates can offer a lower student loan interest rate over the short term, but may fluctuate over the duration of the student loan. Fixed student loan rates are stable and thus much more predictable.
Bottom line for students
There is not a standard student loan interest rate, so students and parents should research all of their options. Students should prioritize federal student loans before private student loans. Specifically, federal student loans will have more favorable repayment plans and give you options including income-based repayment and potential loan forgiveness if you pursue particular careers.
Next step: How to apply for federal and private student loans
For students who are considering private student loans, we always recommend that you shop around and compare various private student loan rates.
Checklist for choosing the best student loan interest rate
- Check to see what your options for federal loans are. These loans typically come with the best interest rates.
- If you don’t qualify for federal loans, or have taken out the maximum amount, start looking at private loans. You can use a student loan marketplace to help make easy comparisons
- If taking out private loans, you’ll be able to choose between variable and fixed interest rates. Make sure to consider this carefully. Fixed rates have the advantage of being more dependable, while variable rates can often be lower.
- Check out our ultimate student loan guide to answer all your other student loan questions!
