Federal student loan interest rates for the 2025-26 college academic year won’t be officially determined until May of 2025, but here are the latest projections based on the latest U.S. Treasury auction results.
2025-26 PROJECTED Federal Student Loan Interest Rates
Projected rates for new loans disbursed on or after July 1, 2025 and before June 30, 2026.
| Loan Type | Borrower | Fixed Interest Rate |
|---|---|---|
| Direct Loans (both subsidized and unsubsidized) | Undergraduate | 6.36% |
| Direct PLUS Loans | Parents | 8.91% |
These PROJECTED rates are for new borrowers who take out new loans during the period of July 1, 2025 through June 30, 2026.
Are You Choosing the Best Student Loan?
Read my article to learn about the best studentloan options to help you pay for college, save money, and avoid graduating with debt.
This year’s projected student loan interest rates are tracking to be slightly lower than they were for the 2024-25 academic year, but that can change. Rates went up over the past few years after plummeting during the early outbreak of the COVID-19 pandemic. Watch this page for updates and for the official rates when they’re released in May of 2025, and make sure that you understand the Best Student Loan Options for 2025-26 and make smart choices for your family.
How Exactly Are Student Loan Interest Rates Determined?
Federal student loan interest rates are determined by federal law and based on the results of a U.S. Treasury auction that takes place each May. Rates either go up, go down, or stay the same depending on the results of that auction. Federal law fixes student Direct Loan interest rates at 2.05 percentage points above the 10-year Treasury yield on notes sold to investors. Parent PLUS Loan rates are fixed at 4.60 percentage points above the 10-year Treasury yield.
The rate or the 10-year Treasury note on March 12, 2025 came in at 4.31%, so the new Direct Loan interest rate for the 2025-26 academic year is currently projecting to be 6.36%, and the Direct Parent PLUS loan rate is projected to be 8.91%.
IMPORTANT NOTE: The new student loan interest rates for 2025-26 will apply only to new loans borrowed between July 1, 2025 and June 30, 2026. They do not apply to any previous loans you may have borrowed. The rates for future loans borrowed after June 30, 2026 will be determined based on future U.S. Treasury Auction results.
Will These Rates Apply to Private Student Loans?
Federal student loan interest rates have no impact on private student loans. Interest rates for private student loans are set by individual banks or other financial institutions. However, it’s always a good idea to compare federal student loan rates with those you might get from a private lender. Private student loan rates can sometimes be better than federal rates depending on your credit and qualifications.
How Will My Interest Be Calculated?
A daily interest formula determines the amount of interest that accrues on your loan between your monthly payments. Here’s how the formula works: Outstanding Principal Balance x Interest Rate Factor x Number of Days Since Last Payment = Interest Amount In other words, the formula multiplies your loan balance by the number of days since you made your last payment, and it multiplies that result by the interest rate factor. The interest rate factor is determined by dividing your loan’s interest rate by the number of days in the year.
Where Can I Learn More?
Before you borrow, it’s important to understand student loans, whether they’re the right fit for you, and their impact on your college financial planning. To learn more about federal loans and other ways to borrow, read my article on the Best Student Loan Options for 2025-26. You can also learn a lot more about student loans, federal financial aid, and the best ways to plan and pay for college by taking my College Planning Jumpstart video course. It’s a paid course, but the strategies and advice you’ll learn could potentially save you thousands of dollars on your college costs. I’ll show you how to get and maximize financial aid, avoid or minimize student loans, save more money for college, and create a winning college financial plan. To learn more or sign up now, check out my College Planning Jumpstart page.