THE BLOG

How Do Your Student Loan Interest Rates Compare?

06/15/2015 11:27 am ET | Updated Jun 12, 2016

As a recent college grad, you may find yourself scrambling to figure out how to pay back your student loans. You may not understand the terms of your loan, how much you'll really owe, or how long it will take you to pay it off.

On the other hand, if you are currently in repayment, you may be wondering how your interest rates compare if you believe your rates are much higher than some of your peers. Your current rates will play a large factor into your monthly payments and your total payment over the course of the loan. We've looked at the average cost of a student loan in the past. Now let's take a look at the average student loan interest rates over the last several years.

Federal Loans

What kind of loan do you have and when were the funds disbursed?

The interest rate on your loan will depend on the type of loan that you have and when the funds were disbursed. Here's a chart showing average interest rates for direct loans first disbursed on or after 1 July, 2014.

Loan Type
Borrower Type
Disbursed on or after 7/1/14 and before 7/1/15
Disbursed on or after 7/1/15 and before 7/1/16
Direct Subsidized Loans

Undergraduate

4.66%

4.29%

Direct Unsubsidized Loans

Undergraduate

4.66%

4.29%

Direct Unsubsidized Loans

Graduate or Professional

6.21%

5.84%

Direct PLUS Loans

Parent and Graduate or Professional

7.21%

6.84%

The US Congress sets these interest rates. These are known as "fixed" interest rates and will not fluctuate over the life of the loan. Perkins Loans have a fixed interest rate of 5% regardless of the first disbursement date and are given to those with exceptional financial need. It is important to remember that these loans all have fees associated with them.

What if my loan was disbursed before 1 July, 2014?

If your loan was disbursed before 1 July, 2014 then your interest rate will once again vary based on the date. Average student loan interest rates generally change every one to two years.

Direct Subsidized Loans for Undergraduates
Disbursement Date
Fixed Interest Rate
7/1/13 - 6/30/14

3.86%

7/1/11 - 6/30/13

3.40%

7/1/10 - 6/30/11

4.50%

7/1/09 - 6/30/10

5.60%

7/1/08 - 6/30/09

6.00%

7/1/06 - 6/30/08

6.80%

- For the 7/1/06 - 6/30/12 period, direct subsidized loans for graduates and professionals stayed at 6.80%.

The Subsidized Federal Stafford Loans for Undergraduates
Disbursement Date
Fixed Interest Rate
7/1/09 - 6/30/10

5.60%

7/1/08 - 6/30/09

6.00%

7/1/06 - 6/30/08

6.80%

 
Direct Unsubsidized Loans
Borrower Type
Disbursement Date
Fixed Interest Rate
Undergraduate

7/1/13 - 6/30/14

3.86%

Graduate or Professional

7/1/13 - 6/30/14

5.41%

Undergraduate and Graduate or Professional

7/1/06 - 6/30/13

6.80%

 

What are interest rates on private loans?

Private student loans can vary from lender to lender. Federal loans generally have lower interest rates compared to private, however private loans offer variable rates. Variable rates will fluctuate with the life of the loan and are currently at historic lows (2% range) - right now they are below federal rates. Private lenders also offer fixed products.

What is your average student loan interest rate?

If your loan is through the government, it is likely that your student loan interest rate will be found on these charts. If you have more than one loan with varying interest rates, your average interest rate will be somewhere in between. As you can see, the average student loan interest rate has been following a downward trend over the past year or so.

How does your rate compare?

Wondering if your interest rate is competitive? If you took out a loan a few years ago, you might realize that you have a much higher interest rate compared to recent borrowers. This does not mean that you are stuck with your current rate. As mentions before, rates are at historic lows signaling a great time refinance your loans. You can take advantage of these current, better rates, and refinance with a new private lender. Some refinancing lenders are offering rates below 2%.

If you want to see how much you could reduce your interest rate and save, visit Credible.

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