Student Loan Interest Rates 2018: Your Guide to Understanding the Numbers

Federal student loan interest rates for the 2018-2019 school year are 5.05% for undergraduate loans, 6.60% for unsubsidized graduate loans and 7.60% for direct PLUS loans. With roughly 70% of students taking out student loans to attend college—in a rising-interest-rate environment—it's important to understand how these loans can impact your finances. Read more to find out how federal student loan rates have changed over time and how they compare to private student lenders.

Federal Student Loan Interest Rates: 2018-2019 School Year

Student loan interest rates will rise for the 2018-2019 school year for all federal loan types disbursed between July 1, 2018 and July 1, 2019. The disbursement date for any student loan is the date on which you receive payment from the lender. Below, we have listed the current student loan rates on the available types of federal loans. Note that these percentages represent the amount of interest you will pay on an annual basis.

Loan TypeBorrower TypeInterest Rate
Direct Subsidized LoansUndergraduate5.05%
Direct Unsubsidized LoansUndergraduate5.05%
Direct Unsubsidized LoansGraduate or Professional6.60%
Direct PLUS LoansParents, Graduate or Professional7.60%

Student Loan Interest Rates From 2006-2018

Over the past 12 years, interest on federal student loans has ranged from 3.4% to 7.90%, depending on the type of loan. Although these student loan rates have fluctuated through the years, rates have been rising since 2016. To see a visual representation of how student loan interest rates have changed over time, we've provided a chart that illustrates the rate pattern for three types of student loans (direct subsidized, direct unsubsidized and direct PLUS) since 2006.

Student Loan Interest Rates

*Note that in the above chart we didn't include the historical rates for Stafford Loans or Federal PLUS Loans. Both loans were part of the Federal Family Education Loan Program (FFEL), which was terminated in 2010. However, we have included their historical rates from 2006 and on in our breakdown below.

Federal Direct Subsidized Loans

While direct subsidized loans are only available to college students with higher financial needs, they are preferable to unsubsidized loans in two significant ways: First, subsidized loans don't accrue interest during the time that you're attending school. Secondly, you are granted a six-month grace period post graduation before you're required to start making payments toward the student loan balance. However, direct subsidized loan interest rates are the same as their unsubsidized counterpart.

Undergraduate Direct Subsidized Student Loans

Disbursement DateInterest Rate
July 1, 2018-June 30, 20195.05%
July 1, 2017-June 30, 20184.45%
July 1, 2016-June 30, 20173.76%
July 1, 2015-June 30, 20164.29%
July 1, 2014-June 30, 20154.66%
July 1, 2013-June 30, 20143.86%
July 1, 2011-June 30, 20133.40%
July 1, 2010-June 30, 20114.50%
July 1, 2009-June 30, 20105.60%
July 1, 2008-June 30, 20096.00%
July 1, 2006-June 30, 20086.80%

Graduate Direct Subsidized Student Loans

Disbursement DateInterest Rate
July 1, 2006-June 30, 20126.80%

Federal Direct Unsubsidized Loans

Direct unsubsidized student loans are easier to qualify for than federal subsidized loans because you don't need to prove financial need. That being said, while the interest rates are identical, the terms for direct unsubsidized student loans aren't quite as good. You'll be responsible for paying the interest accumulated on the loan during the period you are in school. If you don't make these interest payments while in school, the aggregate amount of the interest payments will be tacked onto your total loan amount.

Undergraduate Direct Unsubsidized Student Loans

Disbursement DateInterest Rate
July 1, 2018-June 30, 20195.05%
July 1, 2017-June 30, 20184.45%
July 1, 2016-June 30, 20173.67%
July 1, 2015-June 30, 20164.29%
July 1, 2014-June 30, 20154.66%
July 1, 2013-June 30, 20143.86%
July 1, 2006-June 30, 20136.80%

Graduate or Professional Direct Unsubsidized Student Loans

Disbursement DateInterest Rate
July 1, 2018-June 30, 20196.60%
July 1, 2017-June 30, 20186.00%
July 1, 2016-June 30, 20175.31%
July 1, 2015-June 30, 20165.84%
July 1, 2014-June 30, 20156.21%
July 1, 2013-June 30, 20145.41%
July 1, 2006-June 30, 20136.80%

Federal Direct PLUS Loans

Direct PLUS student loans differ from other federal loan types in that they're more targeted toward graduate and professional students, in addition to parents who are helping their dependent children finance their education. While direct subsidized and unsubsidized student loans won't take your credit history into account, if you're looking to borrow a Direct PLUS loan, a poor credit history could mean that you aren't eligible. Additionally, Direct PLUS loan interest rates are higher than what you'll see for other federal student loans.

Direct PLUS Student Loans

Disbursement DateInterest Rate
July 1, 2018-June 30, 20197.60%
July 1, 2017-June 30, 20187.00%
July 1, 2016-June 30, 20176.31%
July 1, 2015-June 30, 20166.84%
July 1, 2014-June 30, 20157.21%
July 1, 2013-June 30, 20146.41%
July 1, 2006-June 30, 20137.90%

Federal PLUS Student Loans

Disbursement DateInterest Rate
July 1, 2006-June 30, 20108.50%

Private Student Loan Interest Rates

If you're looking for the best student loans to finance your college education, we always recommend that you start by looking at federal student loans first. Federal loan types offer the same fixed interest rate for every borrower and provide multiple repayment plans, which aren't typically offered by private lenders. However, if you've already taken out federal student loans but are still falling short of affording your dream college, then it may make sense to look at private student loan lenders to supplement your federal loans.

With that in mind, interest rates on private student loans can vary widely from lender to lender and also fluctuate based on several other factors, such as your credit score. We looked at five different private lenders to give you an idea of what your average student loan interest rate range may be on a private loan. Unlike federal student loans that have fixed rates, private loan interest rates are set by the lender and can vary based on a number of factors, including if you have a cosigner and the amount borrowed.

LenderFixed Interest Rates*Variable Interest Rates*
SallieMae5.74%–11.85%4.00%–10.86%
Citizens Bank5.25%–12.09%3.94%–11.81%
Discover6.49%–11.99%4.99%–11.24%
Wells Fargo5.94%–11.26%4.30%–10.30%
College Ave5.31%–12.07%3.54%–10.81%

*Rates include auto-pay discount

Comments and Questions