Federal Loan Interest Rates On The Rise

Unfortunately, federal loan interest rates are on the rise

Flickr user EricaJoy

The last thing any student wants to hear is that attending college or graduate school is going to cost more than it did before. Or, that their federal student loan’s interest rate is increasing. Unfortunately, that is the reality. Not only have tuition fees gone up, but federal loan interest rates are on the rise too.

How Federal Student Loan Interest Rates Are Set

Congress sets the interest rates for federal loans every year. The May auction of U.S. Treasury notes is used as the base for determining the interest rate for that particular year. This latest increase only applies to federal student loans disbursed between July 1, 2018 and June 30, 2019.

A Look at the Interest Rates for Different Categories of Federal Loans

Undergrad Student Loans: 

There is a 13.5% increase in interest rates for undergrad student loans. Undergrad students taking federal loans from July 1, for the 2018–2019 academic year will have to pay 5.05 % interest on the loans, up from 4.45% of last year.

Graduate Student Loans:

Grad students taking federal direct unsubsidized loans from July 1, for the academic year 2018–2019 will pay 6.60%, which is an increase from the 6.00 % interest of last year.

PLUS Loans:

The interest rates on PLUS loans are set to rise to 7.6%, increasing from the earlier 7% interest rates.

Two Important Things to Know about this Impending Rise in Interest Rates

1. These new rates of interest are set by the Federal government and they only apply to federal student loans. They do not have any impact on private student loans, which are set by individual private lenders. If you don’t have federal student loans, this doesn’t apply to you.

2. The latest interest rates will not affect your existing student loans. These interest rates are only applicable to new student loans, taken for the academic year 2018–2019. Rest assured, your existing student loans aren’t affected by the increasing interest rate.

Use College Raptor’s free Student Loan Finder to compare lenders and interest rates side by side!


Lender Rates (APR) Eligibility
Sallie Mae logo.
1.25% to 11.35%1 Variable
4.25% to 12.59%1 Fixed
Undergraduate and Graduate
Credibe company logo.
1.04% to 13.19% Variable
3.34% to 14.50% Fixed
Undergraduate and Graduate
Lendkey company logo.
1.49% to 11.10% Variable >800 FICO
3.99% to 14.50% Fixed
Undergraduate and Graduate
Ascent company logo.
2.44% to 12.39% Variable
3.38% to 13.72% Fixed
Undergraduate and Graduate
College Ave company logo.
1.04% to 11.98% Variable
3.34% to 12.99% Fixed
Undergraduate and Graduate
3.52% to 5.50% Variable
4.60% to 6.85% Fixed
Undergraduate and Graduate
Earnest company logo.
1.24% to 11.44% Variable
3.49% to 12.78% Fixed
Undergraduate and Graduate
1Variable interest rates start from 4.12% APR to 10.98% APR. We also offer fixed interest rates from 5.74% APR to 11.85% APR. Click here for important information. Terms, conditions, and limitations apply.
College Raptor is not a loan lender and does not assume responsibility for suggesting a loan to a user who may not be eligible for it. Rates, terms, conditions, eligibility, approval, and other considerations are the decisions of the lenders and may vary depending on which lender or marketplace the user selects. We urge users to carefully consider and review all loan options and terms before committing to taking out a loan.

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