While interest-free loans for college exist, they’re rare and highly competitive. If you’re like most students, you’ll need to borrow student loans — and pay them back with interest.
By learning about the average student loan interest rates available, you can see how your rate stacks up. Here’s what you might expect to pay in order to fund your education.
Average federal student loan interest rates
Unlike other types of lending, your credit doesn’t determine your interest rate on federal student loans. Instead, these rates are set annually by Congress. The newest rates take effect July 1 each year, and every borrower who takes out a specific kind of federal student loan pays the same rate.
Over the past decade, average federal interest rates have remained relatively low, and for many borrowers, are more affordable than what’s available on the private student loan market.
Federal rates today are higherthan they’ve been in years, and are significantly higher than recent averages. Unfortunately, there’s no way to secure lower rates if you want a federal student loan — you’re stuck with what’s on offer.
Average private student loan interest rates
Private student loan rates have much more variation than federal options, as each borrower’s rates are determined based on their individual circ*mstances. Private lenders set minimum and maximum rates, and where a borrower falls within that range depends on the applicant’s credit history, income, the loan repayment term, and other factors.
Private student loan interest rates have fluctuated wildly in recent years, thanks in large part to broader economic trends.
During the COVID-19 pandemic, theFederal Reserveslashed interest rates and private student loan rates fell. But due to record-setting inflation, the Fed was prompted to begin raising rates throughout 2022 and into 2023, which has caused interest rates of all types to increase. Federal Reserve officials predict further rate increases, which could mean student loan interest rates may climb higher.
The companies in the table below are Credible’s approved partner lenders.
4.44.4
Credible rating
Fixed (APR)
4.84% -
Loan Amounts
$10,000 up to total refinance amount
Min. Credit Score
680
Check Rates
on Credible’s website
View Details
Overview
Borrowers who graduated with at least a bachelor’s degree may refinance their student loans with ELFI. Every applicant is assigned a student loan advisor to help guide them through the process.
Students who wish to take over their parents’ PLUS loan may do so by refinancing with ELFI — something not offered by every lender — but spouses can’t consolidate their loans into a single refinancing loan.
Unfortunately, ELFI doesn’t allow borrowers to release cosigners, nor does it offer any rate discounts. However, borrowers who experience financial hardship may be eligible for up to 12 months of forbearance.
Interest rates
Fixed and variable
Minimum credit score
680
Minimum income
$35,000
Loan terms
5, 7, 10, 15, or 20 years for student loan refinancing; 5, 7, or 10 years for parent loan refinancing
Loan amounts
Minimum of $10,000 with no set maximum.
Cosigner release
None
Eligibility
Must be a U.S. citizen or permanent resident with a bachelor’s degree or higher. Must have at least $10,000 in student loans to refinance and a minimum credit history of 36 months.
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4.64.6
Credible rating
Fixed (APR)
5.24% -
Loan Amounts
$5,000 - $250,000
Min. Credit Score
680
Check Rates
on Credible’s website
View Details
Overview
Founded in 2009, LendKey partners with 300+ community banks and credit unions to connect borrowers with the loans they need. You can compare multiple lenders at once without affecting your credit score.
However, the exact terms and qualification requirements available through LendKey vary depending on your chosen community lender. While you can easily compare options, you’ll need to read the fine print of each offer to make sure the loan offers everything you need.
Interest rates
Fixed or variable
Minimum credit score
680
Minimum income
Does not disclose
Loan terms
5, 7, 10, or 15 years
Loan amounts
$5,000 to $250,000
Cosigner release
Varies based on lender's terms
Eligibility
Must be a U.S. citizen or permanent resident and have already graduated with at least an associate degree from one of LendKey lenders’ eligible institutions.
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4.74.7
Credible rating
Fixed (APR)
5.89% -
Loan Amounts
$10,000 - $750,000
Min. Credit Score
Does not disclose
Check Rates
on Credible’s website
View Details
Overview
Citizens offers student loan refinancing to qualifying borrowers who refinance at least $10,000 in student loan debt.
Undergraduate borrowers can refinance up to $300,000 in student loans, while those who borrowed for graduate or professional degrees have higher limits of $500,000 or $750,000. Citizens offers fixed and variable rates and repayment terms between five and 20 years.
If you’re a medical resident, you can refinance your student loans and only pay $100 per month for up to four years while completing your residency or fellowship.
Interest rates
Fixed or variable
Minimum credit score
Does not disclose
Minimum income
Does not disclose
Loan terms
5, 7, 10, 15, or 20 years
Loan amounts
$10,000 minimum, with a maximum of $300,000 for bachelor’s degree or below; $500,000 for graduate degrees; and $750,000 for professional degrees
Cosigner release
36 months
Eligibility
Must refinance at least $10,000 in student loans and be a U.S. citizen, permanent resident, or resident alien with a valid U.S. Social Security number. Must have earned at least a bachelor's degree to qualify.
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3.83.8
Credible rating
Fixed (APR)
6.00% -
Loan Amounts
$7,500 - $200,000
Min. Credit Score
700
Check Rates
on Credible’s website
View Details
Overview
EdvestinU is a loan program offered by Granite Edvance Corporation and offers affordable rates for refinance loans. Borrowers can refinance federal and private loans, and fixed and variable rate loans are available.
EdvestinU refinance loans are available to residents of about 20 states, and the lender has higher loan minimums and lower maximums than some competitors. Both of these factors limit who can (or might want to) refinance with this lender, but eligible borrowers do have various student loan repayment term options.
Interest rates
Fixed or variable
Minimum credit score
700
Minimum income
Does not disclose
Loan terms
5, 10, 15, or 20 years
Loan amounts
$7,500 to $200,000
Cosigner release
24 months
Eligibility
U.S. citizens or permanent residents who are at least 18 years old and reside in Alaska, Arkansas, Colorado, Connecticut, Florida, Maine, Massachusetts, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Puerto Rico, Rhode Island, Texas, Utah, Virginia, Washington, West Virginia, and Wisconsin.
Read full review
3.93.9
Credible rating
Fixed (APR)
6.15% -
Loan Amounts
$5,000 - $250,000
Min. Credit Score
670
Check Rates
on Credible’s website
View Details
Overview
INvestEd is an Indiana-based nonprofit lender that provides refinanced student loans nationwide. As a nonprofit, INvestEd offers competitive rates as well as an autopay discount. Cosigner release is also available after 12 on-time payments, which is less than many competitors.
However, the maximum refinance limit of $250,000 is below what other lenders may allow. Borrowers must also comply with strict credit and income requirements to qualify, or must have an eligible cosigner. While credit requirements are clearly defined, there’s no way to prequalify with a soft credit check.
Interest rates
Fixed or variable
Minimum credit score
670
Minimum income
Does not disclose
Loan terms
5, 10, 15, or 20 years
Loan amounts
$5,000 to $250,000
Cosigner release
12 months
Eligibility
U.S. citizens or permanent residents are eligible. Borrowers must meet minimum requirements including a FICO score of 670 or higher, annual income of $36,000, a debt-to-income ratio below 40% to 50%, a year of continuous employment, and no defaults or serious collection activities in recent years.
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44
Credible rating
Fixed (APR)
6.20% -
Loan Amounts
$10,000 up to the total amount
Min. Credit Score
670
Check Rates
on Credible’s website
View Details
Overview
Massachusetts Educational Financing Authority (MEFA) offers refinancing loans to student borrowers — and unlike many other lenders, you don’t need to have earned your degree to qualify. Only fixed-rate loans are available, but the rates are competitive and may be lower than what other lenders can offer. MEFA also doesn’t charge any fees or penalties.
Refinance loans start at $10,000, and you must have made six consecutive on-time payments on the original loans over the most recent six months. If you can’t qualify based on your own credit history, you can add a cosigner.
Interest rates
Fixed
Minimum credit score
670
Minimum income
Does not disclose
Loan terms
7, 10, or 15 years
Loan amounts
$10,000 up to your total debt
Cosigner release
None
Eligibility
Must be a U.S. citizen or permanent resident who is the primary borrower on education debt used to attend an eligible college or university. Must have made six on-time loan payments over the most recent six months. Must have no history of default or delinquency on education debt for the past 12 months and no history of bankruptcy or foreclosure in the past five years.
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3.73.7
Credible rating
Fixed (APR)
6.34% -
Loan Amounts
$7,500 - $250,000
Min. Credit Score
680
Check Rates
on Credible’s website
View Details
Overview
Founded in 1981, Rhode Island Student Loan Authority (RISLA) is a nonprofit lender that offers refinance loans to borrowers in all 50 states. Though most private lenders require borrowers to have graduated to qualify for refinancing, RISLA also serves borrowers who didn’t complete their degree.
RISLA offers income-based repayment to borrowers in financial distress. Additionally, borrowers may also access up to 24 months of forbearance in the event of financial hardship. Borrowers who return to graduate school may defer repayment on their refinancing loans for up to 36 months.
Interest rates
Fixed
Minimum credit score
680
Minimum income
$40,000
Loan terms
5, 10, or 15 years
Loan amounts
$7,500 minimum up to of $250,000, depending on degree
Cosigner release
None
Eligibility
Borrower or cosigner must meet credit requirements. Student must be a U.S. citizen or permanent resident and have used original student loans to attend an eligible degree-granting institution.
Read full review
All APRs reflect autopay and loyalty discounts where available | LightStream disclosure | SoFi Disclosures | Read more about Rates and Terms
How are student loan interest rates set?
Federal interest rates are set by Congress each year and based on the 10-year Treasury note, plus an add-on margin for each specific loan type. The rate is locked in for loans disbursed during a particular time period, and every borrower who gets that type of loan will pay the same rate regardless of their financial situation.
Private lenders take into account broader economic factors, including the Federal Reserve overnight bank funding rate, which is the rate banks pay to borrow from one another. Based on these factors and other indexes, they set minimum and maximum rates. The actual rate a borrower is offered within that range is determined by personal data, including:
- Credit score:Borrowers with higher scores are viewed as less risky and typically qualify for lower rates.
- Debt-to-income ratio:This compares your monthly debt payments with your earnings. Borrowers with less debt relative to their income are generally viewed as a lower risk and can be offered better rates
- Fixed- or variable-rate loans:Variable-rate loans have interest rates that fluctuate over time based on a financial index. They’re often seen as less of a risk for lenders, so the starting rate on a variable-rate loan may be lower. But the risk is higher for borrowers, who could see their rates and payments rise. Fixed rates never change over the life of the loan, and lenders may not earn as much from them as variable rates.
- Loan term:A longer loan term will generally come with higher rates, as a lender takes on more risk when offering funding over a lengthy period.
How to get the best student loan interest rate
If you’re borrowing to fund your degree and want to pay the lowest rates possible, these strategies could help:
- Shop around among multiple lenders.Every lender will offer you a different deal.Compare your private loan optionsto see which can offer the best terms.
- Improve your credit score.Better credit generally means a better rate. You canimprove your credit scoreby paying your bills on time and paying down existing debt.
- Lower your debt-to-income ratio.Pay off what you owe so you have less outstanding debt and seem like a safer bet to lenders.
- Consider a cosigner.Astudent loan cosigneris someone with good credit who agrees to share responsibility for your debt. If a parent or other loved one will agree to cosign your debt, you can likely lock in a better rate.
FAQ
What is a high student loan interest rate?
What constitutes a high interest rate depends on your financial situation, loan details, and greater economic conditions. Compare the rate you’ve been offered with the averages listed above to see where you land.
You can also use astudent loan interest calculatorto estimate just how much money that rate will cost you over the life of your loan.
How do I compare student loan interest rates?
It’s often helpful to look at the annual percentage rate (APR) rather than the interest rate. A loan’s APR takes into account all costs of borrowing — including fees — while the interest rate just looks at the interest charged.
You’ll also want to be sure you’re comparing apples-to-apples. Specifically, fixed and variable rates work differently.
With a fixed-rate loan, your rate and payment will never change, so you’ll know total borrowing costs upfront. With a variable-rate loan, your rate is tied to a financial index and your loan could become more or less expensive over time. That means your monthly payments and total borrowing costs will vary based on how rates change during your repayment period.
Can you ask for a lower interest rate on student loans?
You typically can’t negotiate a lower student loan interest rate. The rate on federal student loans is set by Congress each year and is based on loan type. The rate you’re offered from a private student loan lender is determined by your financial credentials.
However, you may be able to reduce your rate on private loans by applying with a cosigner or shopping around to find a lender offering better loan terms. You might also find creative ways tolower your student loan interest rateby taking advantage of things like rate discounts.
How do I lower my student loan interest rate?
You may be able to reduce your student loan interest rate byrefinancing your loans. However, you can only refinance with a private student loan lender and will need to shop around to see if you can qualify for a lower rate than you’re currently paying.
Note that refinancing federal student loans comes with added risk, as doing so permanently disqualifies you from federal benefits like forgiveness opportunities, income-driven repayment plans, and more flexible deferment and forbearance.
How will student loan rates change in 2024?
No one knows exactly how student loan rates will change over time. However, the Federal Reserve is expected to continue raising interest rates throughout 2023. This could result in a higher rate to borrow student loans over the next year or more.
Compare student loan rates from top lenders
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Matt Carterhas contributed to the reporting of this article.
Meet the expert:
Christy Bieber
Christy Bieber has been working full-time as a freelance writer since 2008. She has written blogs, news articles, textbooks, and online courses on the topics of law, finance, and history. She lives with her husband, two children, and beagle.
