What Is a High Interest Rate for Student Loans?

Your student loan interest rate plays a significant role in how much you’ll pay each month and over the life of your loan. A lower rate means lower borrowing costs, so it’s important to understand what is considered a high interest rate on student loans, and what you can do to lower it.

Federal student loan interest rates are fixed and set by Congress each year, but private student loan rates vary based on factors like your credit and income. Currently on Credible, fixed private student loan rates range from 2.85% to 17.99% APR. 

Private student loan interest rates

What is a good private student loan interest rate?

Private lenders set their own interest rates, and the rate you're offered is based on your financial profile. On Credible, fixed private student loan rates currently range from 2.85% to 17.99% APR. Variable rates start at 4% and go up to 17.99% APR.

A good rate is on the lower end of those ranges. However, not everyone will qualify. Your rate will depend on several factors, including:

• Credit score: Lenders use your credit score to gauge how likely you are to repay the loan. A higher credit score can help you qualify for a lower interest rate.
• Income: Lenders want to see that your income is stable and high enough to cover monthly payments. Lower income can lead to higher rates.
• Debt-to-income ratio: If you already have a lot of debt compared to your income, lenders may view you as a higher risk and offer you a higher rate.
• Market conditions: Interest rates tend to shift with economic trends, which can affect the starting rates lenders offer.

Private student loan interest rate trends

Federal student loan interest rates

Federal student loans have fixed interest rates, which means the interest rate stays the same over the life of the loan. They are set by Congress and may vary from year to year.

One of the benefits of federal loans is that every borrower taking out a loan during the same time frame is offered the same interest rate for that particular loan type. Your financial credentials and other personalized factors don't affect your rate. 

The table below shows the rates for different kinds of federal loans for the 2025-26 academic year:

Today's federal student loan interest rates are higher than they have been in recent years. The table below shows the 10-year average rate for the same loan types between 2013 and 2023:  

While federal interest rates are higher than average right now, it still makes sense for most students to exhaust federal student loans first due to the many benefits they provide, including income-driven repayment plans and loan forgiveness programs. 

What is a good student loan interest rate?

An ideal student loan interest rate is generally one that matches or is lower than the average rate other borrowers are able to obtain for the same type of loan. 

Regardless of where your rate falls relative to the average, you'll want to make sure that the payments on your loan are affordable for you. Even if you get offered a great rate, you still must be able to make your payments on time and be comfortable with the total borrowing costs you'll pay over time — or else you may want to reconsider borrowing.

Tips for lowering your interest rate

It's worth making the effort to reduce your borrowing costs — especially if you’re borrowing a lot of money for school that you'll be repaying over a long period. 

You may be able to reduce the rate you pay for private student loans with the following options:

• Apply with a cosigner: If you have a family member with solid financial credentials who is willing to cosign your loan, you may be offered a more affordable interest rate.
• Shop around: Rates vary by lender, so get several quotes to ensure you're paying the lowest price possible for your debt. 
• Choose a shorter payoff timeline: Loans with shorter repayment terms often come with lower rates than loans with longer timelines, since the lender is taking on less risk. You'll also save on overall interest — potentially thousands of dollars — by shortening your repayment period. Just be aware that your monthly payment will be higher since you’ll have less time to pay off your debt. 
• Refinance student loans: If you already have private student loans, you may be able to qualify for a refinance loan at a lower interest rate than your current debt if your financial situation has improved. Refinancing can be a great option, as you can potentially reduce your overall cost of borrowing. But keep in mind that refinancing federal student loans means you’ll lose access to perks like income-driven repayment plans, generous deferment and forbearance options, and loan forgiveness.

You can compare offers from the best student loan refinancing companies to see if you can save on your private loans.