Student loan rates will rise from today.
Here’s what you need to know – and what to do with it…
Student loans will become more expensive in the next academic year. Here are the new rates for any federal student loans received after July 1, 2021:
Loans for undergraduate students (subsidized and unsubsidized)
- Current rate: 2.75%
- New rate: 3.73%
Graduate Loans (No Subsidies)
- Current Rate: 4.30%
- New rate: 5.28%
Parent PLUS Loans and Grad PLUS Loans (PLUS Loans)
- Current Rate: 5.30%
- New rate: 6.28%
Why are student loans more expensive? Each year in May, Congress sets the federal student loan interest rates for the coming academic year through an auction of 10-year Treasury bonds. The new interest rates are in effect from July 1, 2021 to June 30, 2022, and interest rates will be 0.98% (percentage points) higher. Unlike last year, when student loan rates fell, student loans will become more expensive for all student loan borrowers who are borrowing federal student loans for the coming academic year.
Student Loans FAQ
What student loans does this affect?
The new interest rates apply to undergraduate student loans (both subsidized and unsubsidized), postgraduate student loans (no subsidies), and direct PLUS loans (including Parent PLUS loans and PLUS loans for undergraduate or professional degrees such as law, business, medicine or dentistry For example).
Does this affect my student loans?
If you have student loans, the new rates will not affect your existing federal student loans. If you are borrowing new student loans then you will be paying a higher interest rate on these new student loans.
Do these interest rates apply to private student loans?
No, these student loan interest rates only apply to federal student loans. Private loans have separate interest rates that are set by the lender you are borrowing from. It is important to note that you should check if your private loans have a variable interest rate. In such a case, the interest rate on existing student loans may change (increase or decrease) as the interest rates change.
Are these new student loan interest rates fixed or variable?
All federal student loans are fixed rate loans. This means that no matter what happens to interest rates, your interest rate will not change.
Can I take out a student loan now to get lower interest rates?
Unfortunately, you cannot take new federal student loans for the upcoming academic year until July 1, 2021 in order to receive a lower interest rate. So, if you are dealing with student loans, you will need to take out loans after July 1st.
My student loans are currently on hold. Does it affect me?
Federal student loan payments are currently on hold until September 30, 2021 due to the temporary cancellation of the student loan. Interest rates on federal student loans are temporarily set at 0%. However, this student loan exemption is for current student loans only. This interest rate increase applies to new student loans received. If this student loan exemption expires, federal student loan payments and regular interest rate will resume from October 1, 2021. It is possible that President Joe Biden May Extend Student Loan Benefit After Sept 30but in the absence of an extension, you should expect to resume your student loan payment on October 1st.
How can I get a lower interest rate on student loans?
Refinancing your student loan is the best way to get a lower interest rate on your student loans, whether federal or private. Currently, Student loan refinancing rates are at an all-time lowwhich means you can get a lower interest rate than your current rate. It will help you save money, pay off student loans faster, and get out of debt. You can refinance federal student loans, private student loans, or both. You can also refinance student, alumni, PLUS and Parent PLUS loans. When you refinance a student loan, you get a new one-time student loan with a lower interest rate and one monthly installment. You can choose between fixed or variable interest rates, and student loan repayment periods from 5 to 20 years.
To qualify for student loan refinancing, you will need a good or strong credit rating (usually 650 or higher), have a job or have a job offer, a stable monthly income, and a monthly cash flow to pay off student loans and other living conditions. expenses. If you are struggling to pay off student loans, need income-based repayment plans, or want to achieve a government service loan (or similar program) forgiveness, then refinancing federal student loans is not recommended. If you are not eligible, you can apply with the help of a qualified collaborator who can help you get approved and get a lower interest rate. Some lenders allow you to release a co-director after you get approval and meet certain requirements.
This student loan refinancing calculator shows how much money you can save by refinancing your student loan.
Student Loans: Related Materials