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Interest rates on federal student loans are likely to rise slightly in the 2026-27 school year, according to an exclusive analysis provided to CNBC by higher education expert Mark Kantrowitz.
Federal student loan interest rates are typically fixed for the life of the loan. Rising interest rates make it even more expensive to pay for college.
The One Big Beautiful Bill Act would implement higher interest rates as it eliminates some affordable student loan repayment plans and other relief options for financially distressed borrowers.
More than 42 million Americans have student loans, totaling more than $1.6 trillion in federal education debt.
Here’s what you need to know:
Expected student loan interest rates for 2026-27
The government sets interest rates for education loans once a year. The interest rate runs from July 1st to June 30th of the following year, and is partially linked to the 10-year U.S. Treasury bond auction in May.
Kantrowitz based his calculations on the high yield of 4.47% announced by the Treasury Department on Tuesday.
Kantrowitz used the results to estimate that the federal direct college loan interest rate could be 6.52% for the 2026-27 academic year. The undergraduate admission rate for 2025-2026 is 6.39%.
At these new undergraduate rates, Kantrowitz calculated that every $10,000 a family borrows will result in a monthly student loan payment of $113.64 after graduation, assuming students are enrolled in a standard 10-year repayment plan. Including interest, the borrower would pay back $13,636.75 over that 10-year period, or $76.84 more than the current interest rate.
For graduate students, loan interest rates will likely be 8.07%, up from the current 7.94%, Kantrowitz said.
He said the interest rate on the Parent PLUS loan could be 9.07%, up from the current 8.94%.
It is unclear when the U.S. Department of Education will officially announce the new fees.
Which borrowers will face higher interest rates
The new interest rate will apply to all federal education loans issued after July 1, 2026.
Most federal student loan interest rates are fixed and will not change the interest rate on your existing loan. Loans are also tied to the school year, so families can’t try to borrow now ahead of interest rate hikes.
Interest rate changes apply only to federal student loans. Private loans typically come with unique (and often higher) interest rates based on factors such as creditworthiness and the borrower’s ability to secure a cosigner.
