US EditionFederal student loan rates soften for 2025-26, making borrowing slightly more affordable
- The U.S. Education Department announced on May 30, 2025, that federal student loan rates will decrease for the 2025-26 academic year starting July 1.
- This follows years of rising rates, with the 2025-26 rates calculated by adding the 10-year Treasury yield to a fixed add-on, resulting in lower percentages than last year.
- The new rates affect new borrowers only, setting undergraduate direct loans at 6.39%, graduate unsubsidized at 7.94%, and PLUS loans at 8.94%, unchanged for current borrowers.
- For example, a $12,500 undergraduate loan at 6.39% interest costs $4,448 over 10 years, down from $4,555 at last year's 6.53%, and rates apply equally regardless of income or credit score.
- Lower rates offer modest savings and may make college borrowing slightly more affordable, while federal loans maintain borrower protections like income-driven repayment and forgiveness options.
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Federal student loan rates soften for 2025-26, making borrowing slightly more affordable
After years of steady increases and record highs, federal student loan interest rates will finally soften this summer — making college slightly more affordable for student borrowers in the upcoming academic year. Related Articles China says US moves on computer chips and student visas ‘seriously violate’ tariffs truce Wall Street drifts as oil prices jump and US manufacturing slumps Business People…
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