Interest rates on federal student loans may increase by 1%

[Pelican Press 0]

Interest rates on federal student loans may increase by 1%

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As a result, federal student loan rates may increase by about 1% in the 2024-2025 academic year, according to an estimate by higher education expert Mark Kantrowitz.

“This is a fairly big jump,” Kantrowitz said.

Here’s what borrowers need to know.

What will the new rates be?

Who is affected? 

All federal education loans issued on or after July 1, 2024, will be subject to the new rates.

Sorry, families: You can’t try to evade the rate increase by borrowing ahead of that deadline. Loans for the 2024-25 academic year must be taken out after July 1.

Don’t worry about loans you’ve taken out for previous academic years: Most federal student loan rates are fixed, meaning the rates on those existing loans won’t change.

The rate changes apply only to federal student loans. Private loans come with their own — often higher — interest rates.

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