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Fixed rate student loans, are interest rates that stay the same throughout the tenure of your loan repayment term. This means your monthly payment against the student loan never changes over time and you know exactly what your repayment costs will be if you make your monthly payments on time. Fixed rate is exactly what the name implies: fixed or the same. The interest rate at the time of your loan commencement will be the same throughout the entire repayment period. For example, if you were given the fixed interest rate of let’s say 7.5% at the time you took the loan, you pay the same 7.5% interest rate every month with no regards to the changing margin and index rate. So, even if the index rate decreases, you pay the same 7.5% meaning you do not benefit from the lower interest rate. But at the same time, you do not have to pay extra if the index rate increases.

Current Student Loan Interest Rates and How They Work

The federal student loan interest rate for undergraduates is 3.73% for the 2021-22 school year.

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Learn more about private student loans

• Find a student loan: Compare private student loans, types and rates
• Pros and cons: How federal and private student loans differ
• How to apply: Wondering where to apply for student loans first?

If you have begun repayment of your federal student loans, their interest rates have been set to 0% until after Aug. 31, 2022, and no payment is due before then.

If you are still borrowing for your education, the federal student loan interest rate for undergraduates is 3.73% for the 2021-22 school year. Federal rates for unsubsidized graduate student loans and parent loans are higher — 5.28% and 6.28%, respectively. The rates for the coming year go into effect on July 1.

Private student loan interest rates can sometimes be lower than federal rates, but approval for the lowest rates requires excellent credit. If you have good credit, you may be able to refinance existing student loans to get a lower rate.

Current student loan interest rates

Refinance student loans
Fixed	2.59% to 9.15%
Variable	1.88% to 8.9%
Private student loans
Fixed	3.34% to 14.99%
Variable	1.04% to 11.99%
Federal student loans (fixed)
Undergraduate	3.73%
Graduate	5.28%
PLUS (Parent, Grad)	6.28%

Rates updated monthly.

Federal student loan interest rates are increasing for the 2021-22 school year and apply to loans disbursed between July 1, 2021, and July 1, 2022. The interest rates for all new federal direct undergraduate student loans are 3.73%, up from 2.75% in 2020-21. Unsubsidized direct graduate student loan rates are 5.28%, up from 4.30%. Rates for PLUS loans, which are for graduate students and parents, are 6.28%, up from 5.30%.Federal student loan interest rates by year

Private student loan interest rates by lender

It’s generally best to max out your federal student loan options before taking out a private student loan. If you need one, shop around first to ensure you get the lowest rate you qualify for. If you don’t meet a lender’s credit requirements, you can apply with a co-signer who does.

Current private student loan interest rates, updated monthly:

Lender	Fixed APR ranges*	Get started
	Fixed: 3.34% – 14.51%	CHECK RATES
	Fixed: 3.22% – 13.95%	CHECK RATES
	Fixed: 3.24% – 12.78%	CHECK RATES
	Fixed: 3.75% – 12.85%	CHECK RATES
	Fixed: 3.75% – 13.3%	CHECK RATES
Compare rates for multiple private student loans.CHECK RATES

Student loan refinancing rates by lender

Average student loan interest rate

The average student loan interest rate is 5.8% among all households with student debt, according to a 2017 report by New America, a nonprofit, nonpartisan think tank. That includes both federal and private student loans — about 90% of all student debt is federal.

With a 5.8% interest rate on $30,000 of student loans, a borrower would pay about $9,600 in interest throughout 10 years.

The average student loan interest rate is higher among some groups, according to the report. For instance, the average rate is 6.3% among households where the borrower didn’t complete a college degree, and 6.6% among households with incomes less than $24,000.

If you have multiple student loans with different rates, the weighted average interest rate is the rate you’ll have if you consolidate the loans through the federal government. Federal consolidation won’t lower your average interest rate, but refinancing with a private lender could.

» MORE: 7 ways to get the lowest student loan interest rate

Student loan interest rate calculator

How student loan interest rates work

Student loan interest rates work differently, depending on whether the loan is federal or private. For federal loans, every borrower taking out the same type of federal loan in a given year has the same interest rate. For private loans, borrowers with higher credit scores generally qualify for lower rates and borrowers with lower credit scores get higher rates.

Federal student loans:

• Congress sets interest rates yearly based on the 10-year Treasury note
• Most have fees charged as a percentage of the total loan amount
• Rates are fixed for the life of the loan

Private student loans:

• Interest rates are typically credit-based
• Most private lenders don’t charge origination fees
• Borrowers can choose either a fixed or variable interest rate
• Variable rates are subject to change monthly or quarterly

» MORE: How Fed rate changes affect student loansTips for repaying student loan interest

Key terms in this story

Fixed interest: An interest rate that does not change during the life of a loan. All federal student loans have fixed interest rates, but private loans can offer fixed or variable interest rates. Fixed interest is the safer option because you don’t have to worry about your rate — and payment — increasing.

Variable interest: Variable interest rates can change monthly or quarterly depending on the loan contract and come with rates caps as high as 25%. Variable interest loans are riskier than fixed interest loans, but can save you money if the timing is right.

Private student loan: Education funding from banks, credit unions and online lenders instead of the federal government. Private loans are best used to fill funding gaps after maxing out federal loans.

At the time of commencement of loan, the interest rate on a fixed rate student loan can be typically higher compared to variable rate student loans with the same repayment term. On a fixed rate loan, the interest rates are mostly set based on your creditworthiness and the range the bank offers. So, a fixed rate means you pay the same interest rate throughout the entire repayment period whereas in case of variable rates, the interest rate may go up or down based on fluctuating index (LIBOR). So, at the end of the day, the decision of whether to choose a fixed or variable rate student loan is entirely up to you. You should carefully figure out your options and choose the one which will best fulfill your requirements.