Federal student loans may come with slightly lower interest rates in the 2025-2026 academic year, according to an estimate by higher education expert Mark Kantrowitz. The drop in interest rates could provide some very modest relief to families trying to cover college costs.

The new interest rates on federal student loans for 2025-26 school year are set to fall slightly. The interest rates on federal student loans are fixed interest rates for the life of the loan. New interest rates apply to loans disbursed between July 1 and June 30.

Student loan interest rates can make a significant difference in how much you make in loan payments over time. Where federal student loans always come with fixed interest rates, private student loan rates can be fixed or variable.

Undergraduate student loans will carry an interest rate of 6.39%, down from 6.53% this year. Graduate direct loans will drop to 7.94% from 8.08%. And PLUS loans for graduate students and parents of undergrads will be 8.94%, compared with 9.08% this year.

Borrowing costs on student loans for the next academic year will likely be near a 15-year high. In the 2025-26 school term, the interest rate on undergraduate student debt is expected to be 6.39%, based off Tuesday’s 10-year US Treasury auction .

Federal student loans typically offer the lowest interest rates, but they can only finance so much of one's education. Oftentimes, borrowers also need to take out a private student loan in ...

The Fed doesn’t directly impact what you pay for federal student loans, yet it might affect variable-rate and private loans. We break down what borrowers need to know — and actionable tips.

Federal student loans should come with slightly lower interest rates in the 2025-2026 academic year. Here’s what to know.