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As student debt becomes more and more common, it is critical that borrowers understand how much student loan interest rates can affect the total payment over the life of a loan. For example, if you took out a 15-year, $50,000 loan at 5 percent interest, a 2 percentage point increase could cost you almost $10,000 in additional interest charges.

Current student loan rates are a large factor in both your monthly payments and total payment over the course of the loan. Knowing the average student loan interest rates for both federal and private student loans can help you make informed decisions when refinancing or applying for private student loans, saving you money and giving you peace of mind.

You can also get real rates from top lenders to refinance your student loans in just 2 minutes with Credible. You can compare offers from a variety of vetted lenders, without having to share any sensitive information, or incur a hard credit pull.

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Let’s take a look at student loan interest rates over the last several years.

Federal student loan interest rates

What kind of loan do you have and when were the funds disbursed?

The interest rate on your loan will depend on the type of loan that you have and when the funds were disbursed. Once you take out a federal loan, the interest rate is fixed for life — to get a lower rate, you can refinance with a private lender.

But interest rates for new federal loans are adjusted annually, using a formula that’s based on yields on 10-year Treasury notes. Here’s a chart showing interest rates for direct loans first disbursed on or after 1 July, 2015. We’ve also included rates for new federal loans to be disbursed after July 1, 2017. As you can see, rates for new federal loans had been falling in step with Treasury yields, but will be increasing by about seven-tenths of a percentage point on July 1, 2017.

Loan TypeBorrower TypeDisbursed on or after 7/1/17 and before 7/1/18Disbursed on or after 7/1/16 and before 7/1/17Disbursed on or after 7/1/15 and before 7/1/16
Direct Subsidized LoansUndergraduate4.45%3.76%4.29%
Direct Unsubsidized LoansUndergraduate4.45%3.76%4.29%
Direct Unsubsidized LoansGraduate or Professional6.0%5.31%5.84%
Direct PLUS LoansParent and Graduate or Professional7.0%6.31%6.84%

Although it wasn’t always the case, today rates on government student loans are fixed for life. Once you take out a federal student loan, the rate won’t change. Perkins Loans have a fixed interest rate of 5 percent regardless of the first disbursement date and are given to those with exceptional financial need. It is important to remember that these loans all have fees associated with them.

What if my loan was disbursed before July 1, 2015?

If your loan was disbursed before July 1, 2015 then your interest rate will depend on the disbursement date.

Direct Subsidized Loans for Undergraduates
Disbursement DateFixed Interest Rate
7/1/13 - 6/30/143.86%
7/1/11 - 6/30/133.40%
7/1/110 - 6/30/114.50%
7/1/09 - 6/30/105.60%
7/1/08 - 6/30/096.00%
7/1/06 - 6/30/086.80%

For the 7/1/06 – 6/30/12 period, rates on direct subsidized loans for graduates and professionals were 6.80%.

Subsidized Federal Stafford Loans for Undergraduates
Disbursement DateFixed Interest Rate
7/1/09 - 6/30/105.60%
7/1/08 - 6/30/096.00%
7/1/06 - 6/30/086.80%
Direct Unsubsidized Loans
Borrower TypeDisbursement DateFixed Interest Rate
Undergraduate7/1/14 - 6/30/154.66%
Undergraduate7/1/13 - 6/30/143.86%
Graduate or Professional7/1/13 - 6/30/145.41%
Parent and Graduate or Professional7/1/06 - 6/30/136.80%

Private loans

What are average interest rates on private loans?

Rates on private student loans can vary from lender to lender. Federal loans for undergraduates generally have lower interest rates compared to private loans. However, private lenders offer variable-rate loans.

Variable rates will fluctuate with the life of the loan and variable rates are currently at historic lows (2 percent range) — meaning right now they are below federal rates (for more on this topic, see “What every borrower should know about variable-rate student loans“).

Private lenders also offer fixed-rate loans, at rates that can be competitive with federal PLUS loans for parents and undergraduates. PLUS loans carry a 4.272 percent up-front disbursement fee that’s not charged by private lenders. As NBC Nightly News report, parents with high-interest PLUS loans are often able to refinance them with private lenders at lower rates (see, “Parents can refinance student loans they take out for their kids.”)

What is your average student loan interest rate?

If your loan is through the government, it is likely that your student loan interest rate will be found on these charts. If you have more than one loan with varying interest rates, your average interest rate will be somewhere in between. As you can see, the average student loan interest rate has been following a downward trend over the past several years.

You interest rate may depend on your field of study, profession or lend provider. Graduate students tend to have a higher interest rate.

How does your rate compare?

Wondering if your interest rate is competitive? If you took out a loan a few years ago, you might realize that you have a much higher interest rate compared to recent borrowers. This does not mean that you cant do anything about your current rate. As mentioned before, rates are near historic lows, signaling a great time refinance your loans. You can take advantage of these current, better rates, and refinance with a new private lender.

Simplify and save on your student loans

See how much you could reduce your interest rate by getting rates from top lenders in just 2 minutes.

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