Current Student Loan Interest Rates: Private and Federal Rates and Trends

Student loan interest rates have seen a notable increase in recent years as borrowing costs of all types climbed from the historic lows touched during the height of the COVID-19 pandemic. The federal student loan interest for the 2024-25 school year is 6.53% for undergraduates and 8.08% or 9.08% for graduate students, depending on the loan type.

As of March 10, the average rate for a 5-year variable-rate private student loan for borrowers with credit scores of 720 or better was 6.04%, down from 7.18% a week earlier, according to data compiled by Credible. For a 10-year fixed private student loan, the average rate was 7.60%, compared with 7.18% the previous week.

Private student loan interest rates are often lower than federal rates, but approval for the lowest rates requires excellent credit. Private student loans are available from institutions including banks, credit unions, and online lenders. Each has its qualification requirements, and rates vary depending on the borrower's credit score and other factors. The Department of Education issues federal student loans. There are no credit score requirements, and rates are the same for all federal student loan borrowers.

However, not everyone is eligible for federal student loans. And those who are may reach their borrowing limits without having enough to cover all of their education costs. In such cases, private student loans can bridge the gap. Interest rates on private student loans are influenced by the borrower's or cosigner's credit, income, and loan term. 

Private student loan interest rate trends

These are the latest trends in private student loan interest rates for borrowers with credit scores of 720 or higher who used the Credible marketplace during the week of March 10:

Private student loan rates over time

This chart shows the weekly average selected prequalified rates for borrowers with credit scores of 720 or higher who used the Credible marketplace to choose a lender:

Every lender has its own method for evaluating borrowers, so it's a good idea to request private student loan rates from multiple lenders and compare your options. You can compare rates from various lenders through Credible without affecting your credit score.

Current private student loan interest rates

Federal student loan interest rates

While federal rate changes can significantly affect the cost of private student loans, federal student loans are generally more stable. That's because federal loans come with fixed rates set annually by Congress. Here are the current federal rates for the 2024-25 school year and how they compare to the prior year.

How private student loan lenders determine interest rates

If you qualify for a private student loan, the interest rate you're offered depends on several factors, including:

• Credit score: One of the most significant factors determining your interest rate is your credit score and credit report. Consider adding a cosigner to your application if you have weak or limited credit. Doing so can help you get approved or qualify for better rates than you would have alone.
• Debt-to-income ratio (DTI): Your DTI represents how much of your monthly income goes to paying off your debt. The lower your debt-to-income ratio, the lower rates you can likely qualify for.
• Fixed or variable rate: Fixed rates stay the same over the life of your loan, while variable rates can fluctuate according to market conditions. It's common for variable rates to start out lower than fixed ones, but it's possible that variable rates could increase in the future, making your loan more expensive.
• Loan repayment term: Lenders typically view longer-term loans as riskier. Because of this, you may get a lower interest rate if you agree to pay off your loan more quickly. Note that this will make your monthly payments higher than a longer loan term would.