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Federal Student Loan Interest Rates Reach 5.5%

Direct subsidized and unsubsidized loans for undergraduate students reached 5.5 percent for the 2023-24 academic year, the highest interest rate in almost a decade.

Posted July 17, 2023

Federal student loan interest rates for the 2023-24 academic year are the highest they’ve been in at least a decade, according to a report by NerdWallet.

In the 2009-10 school year, Interest rates for undergraduate direct subsidized loans reached 5.6 percent. Now, interest rates are sitting a 5.5 percent for undergraduate direct loans. While grad students’ direct loans will be facing a 7.05 percent interest rate.

The new rates apply to all loans taken out from July 1, 2023, to June 30, 2024, according to the Education Department.

Key takeaways from NerdWalltes report:

  • Direct subsidized and unsubsidized loans for undergraduate students, 5.5 percent for the 2023-24 academic year; up from 4.99 percent for the 2022-23 academic year.
  • Direct unsubsidized loans for graduate students, 7.05 percent for the 2023-24 academic year; up from 6.54 percent for the 2022-23 academic year.
  • PLUS loans for graduate students and parents, 8.05 percent for the 2023-24 academic year; up from 7.54 percent for the 2022-23 academic year.

Read the full report, here.