Borrowing, limits and rates · guide
Federal student loan interest rates for 2026-27
New federal student loans first disbursed from July 1, 2026 through June 30, 2027 carry 6.52% for undergraduates, 8.07% for graduate and professional students on unsubsidized loans, and 9.07% on PLUS loans to parents or graduate students. Each rate is the high yield of the 10-year Treasury note sold at the May 12, 2026 auction, rounded to 4.47%, plus a fixed add-on written in the Higher Education Act: 2.05%, 3.6% and 4.6%. None of the three came close to its statutory ceiling of 8.25%, 9.5% or 10.5%. The undergraduate rate is up 0.13 point from 2025-26, when it stood at 6.39%. Once a loan is disbursed, its rate never moves, so a student who borrows every year ends up holding a stack of loans at different rates. In practice a freshman's $5,500 of Direct Loans, if all unsubsidized, accrues about $359 of interest in its first year, while a parent's $20,000 PLUS loan accrues about $1,814.
Interest in the first year of a new loan
Interest over the first 12 months
$359
| Fixed rate for 2026-27 | 6.52% |
| How it is built | 4.47% Treasury + 2.05% add-on, cap 8.25% |
| Interest per month | $30 |
| Interest per day | $0.98 |
Simple interest on the amount disbursed, before any payment. Subsidized loans are not charged interest while you are in school at least half time.
Three fixed rates apply to every Direct Loan first disbursed this award year, and one Treasury auction decided all of them.
Checked by Radif Partners · Editorial policy · How we calculate
The formula behind the three numbers
For every Direct Loan first disbursed since July 1, 2013, section 455(b) of the Higher Education Act ties the rate to the market for government debt rather than to a number Congress picks. The Department reads the high yield of the 10-year Treasury note at the final auction held before June 1, adds a margin that depends on the loan and the borrower, and checks the result against a ceiling. For 2026-27 the yield at the May 12, 2026 auction was 4.468%, rounded to 4.47% (Federal Register 2026-18493).
| Loan | Treasury yield | Add-on | Cap | Rate 2026-27 |
|---|---|---|---|---|
| Direct Subsidized and Unsubsidized, undergraduate | 4.47% | 2.05% | 8.25% | 6.52% |
| Direct Unsubsidized, graduate or professional | 4.47% | 3.6% | 9.5% | 8.07% |
| Direct PLUS, parent or graduate | 4.47% | 4.6% | 10.5% | 9.07% |
Two details trip people up. The rate attaches to the date of first disbursement, not the date you sign the promissory note or the academic year printed on your award letter. A fall installment paid out in August 2026 and a spring installment paid in January 2027 belong to the same loan and share one rate. And the three margins are fixed by law, so the spread between loan types never changes: graduate borrowers always pay 1.55 point more than undergraduates, and PLUS borrowers 1.00 point more than graduate students, as long as nobody reaches a cap.
Four years of rates side by side
| Award year | Undergraduate | Graduate unsubsidized | PLUS |
|---|---|---|---|
| 2026-27 | 6.52% | 8.07% | 9.07% |
| 2025-26 | 6.39% | 7.94% | 8.94% |
| 2024-25 | 6.53% | 8.08% | 9.08% |
| 2023-24 | 5.5% | 7.05% | 8.05% |
The series moves with the bond market and nothing else. The rise from 5.5% in 2023-24 reflects higher Treasury yields, not any policy choice about students. That is also why nobody can promise what next year's rate will be: it depends on an auction that has not happened yet. A student who expects to borrow over several years should simply plan on a mix of rates, each locked when its loan is paid out.
What a fraction of a point is worth
Rate differences look small on paper and add up on a long balance. Take $31,000 of undergraduate loans, the dependent aggregate limit, repaid over ten years. At this year's 6.52%, the monthly payment is about $352, or $42,278 in all. At the 5.5% of 2023-24 it would have been $336 a month and $40,372 over the decade. The gap, $1,906, is real money, but it is smaller than many families fear, and it pales next to the effect of borrowing $5,000 less.
The first year of a loan gives a feel for the cost before any payment is due. A graduate student who takes the full $20,500 unsubsidized loan at 8.07% sees about $1,654 of interest accrue in twelve months. A parent who borrows $20,000 in PLUS at 9.07% sees about $1,814. Federal loans charge simple interest that accrues daily, so these figures grow in a straight line until the interest is capitalized or paid. The mini-calculator above runs the same arithmetic for any amount, and the interest calculator follows a balance through school, grace and repayment.
Subsidized loans and the interest you do not pay
A Direct Subsidized Loan carries the same 6.52% as its unsubsidized twin, yet costs less, because the government does not charge interest while the student is enrolled at least half time and during the grace period. Only undergraduates with financial need receive them, up to $3,500 in the first year. Graduate and professional students have no subsidized option, so the whole 8.07% runs from the day the money reaches the school. The loan limits page lists the subsidized share of each annual limit.
A stack of loans, a stack of rates
Because each year's loans lock in that year's rate, a four-year student rarely holds one rate. Picture a dependent student who started college in 2023-24 and borrowed the annual maximum each year: $5,500 at 5.5%, $6,500 at 6.53%, then $7,500 at 6.39% and the same amount again at 6.52%. Servicers bill those loans together, but each keeps its own rate and its own interest clock. Extra payments are best aimed at the loan with the highest rate, which here is the most recent one. You can usually tell your servicer how to apply an amount above the required payment; without an instruction it is spread by its own rules.
Older balances follow other rules. Loans first disbursed between July 2006 and June 2013 carry rates written directly into the statute, such as 6.80% on unsubsidized loans and 7.90% on PLUS loans, and those numbers have not changed since (rates notice, Chart 3). Some loans from before 2006 still carry variable rates reset each July, announced in a separate notice. If you hold any of them, your servicer statement shows the rate loan by loan, and that statement, not this page, is the reference for your own account.
Ways to pay a lower effective rate
The stated rate cannot be renegotiated with the Department, but the rate you actually pay can come down. Auto pay usually takes 0.25% point off. Under an offer announced in June 2026, borrowers enrolled in auto pay by December 31, 2026 receive a total reduction of 1% point from July 1, 2026 through June 30, 2028, on Direct Loans originated after July 1, 2012 (Department of Education, September 29, 2026). On a new undergraduate loan that brings 6.52% down to 5.52% for as long as the offer lasts and the payments keep coming from your bank account. The auto pay page covers who qualifies and how to enroll.
Paying interest while still in school is the other lever. It does not change the rate, but it stops unpaid interest from being added to principal later, which keeps the next year of interest from compounding on itself. On the Repayment Assistance Plan, a payment made on time also wipes the interest it does not cover, which can push the effective cost far below the stated rate for borrowers with modest incomes; the RAP calculator shows how much.
Consolidation and refinancing are different tools
Consolidation combines federal loans into one Direct Consolidation Loan. Its rate is the weighted average of the loans it repays, rounded up to the nearest one-eighth of a point, so it never saves interest; it simplifies billing and, for some loans, opens or closes repayment plans. A borrower combining $18,000 at 6.52% with $12,000 at 8.07% would get 7.25%. A consolidation made after July 1, 2026 can only be repaid under RAP or the Tiered Standard plan, a trade-off the consolidation guide weighs. Refinancing with a private lender is the only way to get a different rate, and it ends access to every federal plan and forgiveness program; the refinance calculator puts a price on that trade.