Federal student loan interest rates reset every July. Here are the rates for loans first disbursed in the 2025-26 year.
2025-26 Direct Loan rates
| Loan type | Borrower | Fixed rate |
|---|---|---|
| Direct Subsidized & Unsubsidized | Undergraduate | 6.39% |
| Direct Unsubsidized | Graduate / professional | 7.94% |
| Direct PLUS | Parents and (existing) grad students | 8.94% |
Source: Federal Student Aid, loans first disbursed July 1, 2025 - June 30, 2026. As of June 2026.
How the rate is set
Each year’s rate is the high yield of the final 10-year Treasury note auction before June 1, plus a statutory add-on that depends on loan type. Once set, the rate is fixed for the life of that loan. Loans you take in a different year can carry a different rate - the 2026-27 rates (loans disbursed on or after July 1, 2026) differ, so verify the current figure at studentaid.gov before borrowing.
What changed under OBBBA
OBBBA ends new Grad PLUS borrowing for students whose first loan is on or after July 1, 2026, and changes loan limits. It does not change the rate on loans you already hold.
Why the rate matters for repayment
On fixed plans, a higher rate means more total interest - use the payoff calculator to see the difference. On RAP, unpaid interest is waived, which softens the effect of a high rate; see how RAP works.
General information, not financial or legal advice. Verify current rates at studentaid.gov.