Average student loan interest rates vary depending on the details of the loan you choose. Federal student loan interest rates are set by Congress every spring, but private student loan rates, on the other hand, depend on your financial situation, credit history, and other factors.
In general, average federal student loan interest rates are between 5% to 7.5%, but rates fluctuate according to economic factors. Average private student loan interest rates tend to be between 4% and 15% depending on the lender while the average for refinancing is between 4% and 12%.
Here’s what you need to know about average student loan interest rates (and how to find your best rate):
With federal student loans, rates are always fixed, so you pay the same interest rate over the length of the loan. The rates of private student loans can be either fixed or variable, meaning the rate can go up or down over time.
The federal government publishes its student loan interest rates, which are set by Congress based on the previous 10-year Treasury note auction. The chart below shows interest rates for federal student loans taken out between July 1, 2022, and June 30, 2023.
| Federal student loan type | Fixed interest rate |
|---|---|
| Direct subsidized loans (undergraduate) | 4.99% |
| Direct unsubsidized loans (undergraduate) | 4.99% |
| Direct unsubsidized loans (graduate/professional) | 6.54% |
| Direct PLUS loans | 7.54% |
There’s much more variability to private student loan rates, which ranged from about 3.65% to 16.20% among national lenders in May 2023. Each lender sets its own rates, which differ based on the loan as well as the borrower.
When you shop for loans from private lenders, the rate they quote you takes into account loan type, credit history, income, and other factors. The stronger your loan application, the lower your quoted rate would be.
Here are a few Credible partner lenders below to consider (rates mentioned are as of May 2023).
Here are more student loan companies we evaluated. Rates listed below were as of May 2023.
Credible evaluated private student loan lenders in 10 different categories to determine the best lenders for student loans. This included interest rates, repayment options, terms, fees, discounts, customer service availability, as well as eligibility requirements and cosigner release options. View our full methodology for more detail.
Federal student loans come from the U.S. Department of Education, and they carry fixed interest rates, which stay the same over the length of repayment.
For 2022-2023, federal student loan interest rates range from 4.99% to 7.54%. You can find out what the government is charging in interest for student loans by checking the Federal Student Aid website. It updates interest rates for all student loans every July. The next update occurs July 1, 2023.
Here’s a historical view at how the average federal student loan interest rates have changed. Keep in mind this covers the average for Direct Subsidized Loans and Federal Stafford Loans for undergraduate borrowers:
| First disbursement date | Fixed interest rate |
|---|---|
| 7/1/06–6/30/08 | 6.8% |
| 7/1/08–6/30/09 | 6.0% |
| 7/1/09–6/30/10 | 5.6% |
| 7/1/10–6/30/11 | 4.5% |
| 7/1/11–6/30/13 | 3.4% |
| 7/1/13–6/30/14 | 3.86% |
| 7/1/14–6/30/15 | 4.66% |
| 7/1/15–6/30/16 | 4.29% |
| 7/1/16–6/30/17 | 3.76% |
| 7/1/17–6/30/18 | 4.45% |
| 7/1/18–6/30/19 | 5.05% |
| 7/1/19–6/30/20 | 4.53% |
| 7/1/20–6/30/21 | 2.75% |
| 7/1/21–6/30/22 | 3.73% |
| 7/1/22-6/30/23 | 4.99% |
In addition to undergraduate student loans, private and federal loans are also available for graduate students, parents, and professionals seeking graduate degrees.
The interest rates for these loans tend to be higher than the interest rates for undergraduate loans, and they may not decrease as quickly. Typical private loan rates for these loans range from about 6.8% to 15%.
Student loan fees are another cost of borrowing. For instance, you might encounter an origination fee, which is the fee a lender charges to originate your loan. It’s usually a percentage of the total loan amount. If you borrow a $10,000 loan with a 0.50% origination fee, the fee would be $50.
| Tip: When considering student loan options, it’s wise to make apples-to-apples comparisons using APR. Annual Percentage Rate accounts for both the simple interest rate and the loan’s fees. |
Although many private lenders don’t charge any fees for student loans, others do.
In addition to origination fees, a private lender might charge a prepayment penalty, which is a fee for paying off your loan early. Other common fees could be incurred for…
Reputable private student loan lenders generally don’t charge most of these fees.
Federal student loans have fees, too. For federal student loans (both subsidized and unsubsidized direct loans) taken out before Oct. 1, 2023, the fee was set at 1.057%. For parent and Grad PLUS loans, the fee was 4.228%.
A loan fee for your federal student loan comes out of your disbursement amount, lowering the funds you receive. So if you borrow $10,000, you’d owe a loan fee of $105.70 for a direct loan, or $422.80 for a PLUS loan. That means the money you actually receive would be $9,894.30 (or $9,577.20 for the PLUS loan).
It’s possible to get a lower student loan interest rate if you know what steps to take.
Related: Learn more about refinancing your student loans on Credible.com
Compare the interest rate and fees (APR) as well as the repayment term associated with each loan.
For example, one loan has an interest rate of 5.00% but a 1.00% loan fee, how does that compare to the loan with a 6.50% interest rate and no loan fees? While it may appear the loan with no fees is enticing, the higher interest rate means you’ll be paying more every month and end up with higher interest overall. You can use an APR calculator to determine the interest and fees for your specific loan.
Consider the loan term, too: You would pay less interest for a 5-year loan than you will for a 20-year loan, even if everything else is the same. But you also need to confirm your ability to repay the loan over a shorter schedule. You can do that by estimating your dues using a monthly payment calculator and setting a budget.
You’ll probably benefit from refinancing if the new rate is at least one percentage point lower than the rate you have now.
For instance, if you currently have a student loan with an interest rate of 7.50%, you’d want to make sure you could find a loan for 6.50% or less. If you can’t, then it probably isn’t worth it to refinance.
| Keep in mind: Refinancing is a whole new loan. If you’ve already been making payments for years on your existing loan, refinancing to a new, longer term would increase the interest you’ll have to pay over time. Ask yourself: Will the monthly savings be enough for you to make a significant change in your life? Or will a longer repayment period ultimately cost you more in interest? |
Related: Learn more about refinancing your student loans on Credible.com