Average Student Loan Interest Rate [2021]: New & Existing Loans

Average Student Loan Interest Rate [2021]: New & Existing Loans

  • Among all present debtors, 5.8% is the typical student loan rate of interest.
  • For new undergraduate loans, the present federal rate of interest is 3.73%.
  • All federal loan rates of interest have been quickly set to 0% till January 31, 2022; 91.9% of all student loan debt is federal.
  • Current refinancing charges from non-public lenders vary from 2.25% to 12%.
Current Federal Interest Rates
Student Borrowers Loan Type Interest Rate
Undergraduate Direct 3.73%
Graduate & Professional Direct 5.28%
Parent, Graduate & Professional PLUS 6.28%

Student Loan Interest Rates

Student loan rates of interest have been at historic lows for the 2020-2021 tutorial 12 months in response to the ever-ballooning nationwide student debt, which was labeled a disaster as early as 1995.

  • 5.8% is the typical student loan rate of interest amongst all student loans, federal and personal.
  • The common federal loan rate of interest is 4.12%.
  • Between 2019-20 and 2020-21, all federal student loan rates of interest fell a median 31.24%.
  • Interest charges for undergraduate loans fell 62% quicker than rates of interest for graduate {and professional} students.
  • The undergraduate federal rate of interest has declined 80.36% since charges peaked at 14% within the early Nineteen Eighties.
  • Consolidating federal loans doesn’t lower rates of interest, however refinancing could.

Line Graph: Federal Student Loan Interest Rates for undergraduates, graduates, professionals, and parents

Federal Interest Rates

92.24% of all student loan debt is federal. Federal loan rates of interest are fastened, which means the rate of interest stays the identical so long as there’s an impressive stability on the loan.

  • The rate of interest amongst all federal student loans declined 30.17% – down from 5.90% – between the 2019-2020 and 2020-2021 tutorial years.
  • The common federal loan rate of interest since 2006 is 6.05%.
  • The undergraduate rate of interest is 3.73%.
  • The present undergraduate rate of interest is up 36.5% YoY.
  • Over the previous 5 years, the typical rate of interest for undergraduate student loans has been 4.11%.
  • Federal rates of interest are adjusted yearly on July 1st.
  • The rate of interest for a Direct Consolidation Loan is decided by the weighted common of the consolidated loans’ rates of interest rounded as much as the closest 1/8%.
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Federal Direct Student Loan Interest Rates for Undergraduates
Disbursement Period Interest Rate
7/2021-6/2022 3.73%
7/2020-6/2021 2.75%
7/2019-6/2020 4.53%
7/2018-6/2019 5.05%
7/2017-6/2018 4.45%
7/2016-6/2017 3.76%
7/2015-6/2016 4.29%
7/2014-6/2015 4.66%
7/2013-6/2014 3.86%

Line Graph: Average Interest Rates for All Federal Loans

Historical Federal Interest Rates

While the earliest federal student loan progams date to 1944, they have been solely accessible to army veterans till 1958.

  • In 1982, federal rates of interest ran as excessive as 14%.
  • In 1988, undergraduates may get loans at an rate of interest of 9%.
  • In 1992, federal rates of interest ran from 7% to 10%.
  • Federal rates of interest fell by a median 36.19% between 2010 and 2020.
  • The common federal loan rate of interest has declined % since 2006.
  • Federal rates of interest for undergraduates have declined % since 2006, an annual fee of %.
  • From 2006 till 2013, the fastened rate of interest for Direct Unsubsidized Loans for undergraduates was 6.80%.
  • From 2006 till 2012, teh fastened rate of interest for graduate {and professional} students was 6.8%.
  • As of July 1, 2012, graduate {and professional} students are not eligible for backed loans.
  • Starting with the 2013-2014 tutorial 12 months, Undergraduate Direct Loans carry the identical rate of interest whether or not they’re backed or unsubidized.
  • Also beginning in 2013, rates of interest modify yearly.
  • Prior to the 2013-2014 tutorial 12 months, rates of interest have been typically larger and didn’t at all times change from 12 months to 12 months.
Federal Direct Subsidized Loan Interest Rates for Undergraduates
Disbursement Period Interest Rate
7/2011-6/2013 3.4%
7/2010-6/2011 4.5%
7/2009-6/2010 5.6%
7/2008-6/2009 6.0%
7/2006-6/2008 6.8%
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Graduate, Professional, & Parent Rates

Interest charges for fogeys and graduate students haven’t fallen as rapidly as loans for undergraduates.

  • Direct loans for graduate {and professional} students declined 29.28% within the final 12 months.
  • PLUS loans for fogeys and for graduate and professoinal students declined 25.14%.
  • Between the 2019-2020 and 2020-2021 tutorial years, rates of interest for these loans noticed their largest ever year-over-year declines.
  • Graduate and Professional direct loan rates of interest are decliing 38.27% slower than these for undergraduate loans.
  • PLUS loan rates of interest have declined 44.74% slower than these for undergraduates.
  • Compared to Direct loans for graduate {and professional} students, PLUS loan rates of interest have declined 10.48% slower.
  • The now-defunct Federal Family Education Loan Program (FFEL) had a set rate of interest of 8.5% for fogeys, graduates, {and professional} debtors.
Federal Direct Loan Interest Rates for Graduate & Professional
Disbursement Period Interest Rate
7/2021-6/2022 5.28%
7/2020-6/2021 4.30%
7/2019-6/2020 6.08%
7/2018-6/2019 6.60%
7/2017-6/2018 6.00%
7/2016-6/2017 5.31%
7/2015-6/2016 5.84%
7/2014-6/2015 6.21%
7/2013-6/2014 5.41%
7/2006-6/2013 6.80%
Federal PLUS Loan Interest Rates for Parents, Graduates & Professionals
Disbursement Period Interest Rate
7/2021-6/2022 6.28%
7/2020-6/2021 5.30%
7/2019-6/2020 7.08%
7/2018-6/2019 7.60%
7/2017-6/2018 7.00%
7/2016-6/2017 6.31%
7/2015-6/2016 6.84%
7/2014-6/2015 7.21%
7/2013-6/2014 6.41%
7/2006-6/2013 7.90%

Private Loan Interest Rates

Private lenders have began to implement methods just like federal reduction in an effort to preserve default charges at historic lows; the present non-public loan default fee is 2%.

  • Official report estimates for the general common non-public student loan rate of interest typically vary from 6% to 7%.
  • Among main non-public lenders, 12.99% is the best annual proportion fee (APR).
  • The lowest accessible APR amongst non-public lenders is 1.04% (together with an auto-pay low cost)*.
  • 93% of personal undergraduate loans have a co-signer, which usually lowers a borrower’s rate of interest.
  • 60% of graduate loans are co-signed.
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*Both of those charges are from CollegeAve.

Refinance Loan Interest Rates

Federal and personal student loans can solely be refinanced by way of non-public lenders.

  • One research discovered that if each eligible borrower refinanced their loans, the nationwide common rate of interest would drop to 4.2%.
  • 52.8% of debtors are eligible for refinancing.
  • 33.3% of debtors consolidate or refinance their loans.

For extra data, see our report on Student Loan Refinancing.

Sources

  1. New America, In the Interest of Few
  2. U.S. Department of Education (ED) Office of Federal Student Aid (OFSA), Federal Interest Rates and Fees
  3. ED, Federal Student Aid Policy: A History and an Assessment
  4. PR Newswire, Latest MeasureOne Private Student Loan Report Finds Pandemic-Related Forbearance
  5. Bankrate, Current Student Loan Interest Rates