Student loan interest rates to rise for 2026-27: Expert analysis
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interest rates on federal student loans A slight increase is likely in the 2026-27 academic year, according to an exclusive analysis provided to CNBC by higher education expert Mark Kantrowitz.
Federal student loan rates are generally fixed for the life of the loan. The increase in interest rates will make it more expensive to pay for college.
The higher rates would go into effect as the One Big Beautiful Bill Act eliminates several affordable student loan repayment plans and other relief options for financially struggling borrowers.
More than 42 million Americans have student loans, and collectively outstanding federal education debt exceeds $1.6 trillion.
Here’s what you need to know.
Expected student loan interest rates for 2026-27
The government determines the interest rates on education loans once a year. Rates valid from July 1 to June 30 of the following year depend in part on the auction in May. 10-year Treasury Note.
Kantrowitz based his calculations on the 4.47% high yield rate the Treasury Department announced Tuesday.
Using this result, Kantrowitz estimated that the interest rate on federal direct undergraduate loans could be 6.52% in the 2026-27 academic year. License rate for 2025-26 6.39%.
Under these new undergraduate rates, assuming the student enrolls in a 10-year degree, every $10,000 in debt a family takes on will result in a monthly student loan payment of $113.64 after graduation. Standard Repayment PlanKantrowitz calculated: With interest, the borrower would repay $13,636.75 over this decade, or $76.84 more at the current exchange rate.
Kantrowitz found that loans for graduate students would likely come with an interest rate of 8.07%, compared to the current 7.94%.
Parents The interest rate on PLUS loans could rise to 9.07% from 8.94% currently, he said.
It’s unclear when the U.S. Department of Education will officially announce the new rates.
Which borrowers face higher rates
All federal education loans made on or after July 1, 2026 will be subject to the new rates.
Most federal student loan rates are fixed, meaning rates on existing loans will not change. Loans are also tied to the academic year, so families can’t try to borrow now to avoid interest rate hikes.
Rate changes apply only to federal student loans. Private loans come with their own — interest rates – often higher – are often based on factors such as creditworthiness and the borrower’s ability to secure a co-signer.
