FAQs
Federal student loan interest rates highest in more than a decade. The U.S. Department of Education announced that the interest rates on federal student loans for the 2024-25 academic year is 6.53% for undergraduates, up from 5.5% for the 2023-24 school year.
When did student loan interest get so high? ›
For graduate and parent borrowers, costs were raised to their highest levels since 2006, with interest rates set over 9% (Figure 1). These higher interest rates could cost students over $3 billion in additional interest for loans taken out in this year alone.
What is the historical interest rate for federal student loans? ›
Interest Rates on Federal Stafford Loans
Academic Year | Fixed vs. Variable | Subsidized |
---|
2018-2019 | Fixed | 5.045% |
2017-2018 | Fixed | 4.45% |
2016-2017 | Fixed | 3.76% |
2015-2016 | Fixed | 4.29% |
11 more rows
How much has student debt increased in 10 years? ›
The total U.S. loan debt has more than doubled in the past 15 years. It has increased by: 127% in 15 years. 42% in 10 years.
Which federal student loans carry the highest interest rates? ›
Federal student loan rates over the years
Loan type | 2024 – 2025 | 2021 – 2022 |
---|
Subsidized (undergrad) | 6.53% | 3.73% |
Unsubsidized (undergrad) | 6.53% | 3.73% |
Unsubsidized (grad) | 8.08% | 5.28% |
PLUS (grad & parent) | 9.08% | 6.28% |
Sep 3, 2024
When did student loans skyrocket? ›
During the 1990s, two major federal initiatives spurred student borrowing, which rose from $16.4 billion to $37.5 billion over that decade.
Why is my interest rate so high on my student loan? ›
If you don't have an excellent or even good credit score, your interest rate will be higher than that of someone with a better score. You have private student loans: Federal student loans have several protections, like deferment, forbearance and income-driven repayment plans.
What is the highest federal interest rate in history? ›
The benchmark interest rate in the United States was last recorded at 5.50 percent. Interest Rate in the United States averaged 5.42 percent from 1971 until 2024, reaching an all time high of 20.00 percent in March of 1980 and a record low of 0.25 percent in December of 2008.
What is the current average student loan interest rate? ›
The interest rate among all federal student loans increased by 8.02% – up from 6.36% – between the 2022-2023 and 2023-2024 academic years. The average federal loan interest rate since 2006 is 5.99%. The undergraduate interest rate is 5.50%. The current undergraduate interest rate is up 10.2% YoY.
What was the interest rate on student loans in 1980? ›
During the late 1970s and early 1980s, when interest rates on mortgages were in the double digits, the interest rate on student loans was fixed at eight percent. This meant that student loans were an excellent deal.
20% of U.S. adults report having paid off student loan debt. The 5-year annual average student loan debt growth rate is 15%. The average student loan debt growth rate outpaces rising tuition costs by 166.9%. In a single year, 31.5% of undergraduate students accepted federal loans.
How much does the average person have in student loan debt? ›
Average Student Loan Debt by State
State | Average Debt |
---|
State Arizona | Average Debt $35,511 |
State Arkansas | Average Debt $33,624 |
State California | Average Debt $37,810 |
State Colorado | Average Debt $37,113 |
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How many students have over $100,000 in debt? ›
Student loan borrowers by balance owed
Most borrowers actually have relatively small debt balances. More than 30% of borrowers, for example, owe less than $10,000, while less than 8% of borrowers owe more than $100,000.
Who controls federal student loan interest rates? ›
Federal student loan interest rates are reviewed and determined based on 10-year Treasury notes, plus a fixed rate of interest. They're reset on July 1 of every year. Rates are set by federal law (not the Department of Education).
Can you lower federal student loan interest rates? ›
You can reduce your interest rate by 0.25% by signing up for auto pay. This won't change your monthly payment amount, but you may end up paying less in the long run.
Why are student loans so hard to pay off? ›
Key Points. Interest can make student loans more expensive, while inflation can make that debt harder to manage alongside other bills. Paying off some of your debt during your studies could ease the burden later on and save you money on interest.
Is 8% interest high for student loans? ›
Learn more about private student loans
The federal student loan interest rate for undergraduates is 6.53% for new loans taken out for the 2024-25 school year, effective from July 1, 2024 to June 30, 2025. Federal rates for graduate student loans and PLUS loans are higher — 8.08% and 9.08%, respectively.
Will student loan interest rates go down in 2024? ›
A fixed rate will not change for the life of the loan. If your loan was disbursed before July 1, 2023, you likely have a different interest rate.
What were the interest rates on student loans in 1995? ›
1994-95: Change in the cap on the Stafford Loan from 9.0% to 8.25% and the cap on the PLUS Loan from 10.0% to 9.0%. 1992-93: The cap on the PLUS Loan was changed from 12.0% to 10.0%, and the interest rate was reduced by 15 basis points.