Student Loan Interest Reduction

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For the first time in three years, the interest rates on Federal student loans will decrease anywhere from seven to ten percent depending on the loan type. This will take effect for new Federal student loan borrowers after July 1, 2019.

Federal student loans are typically the lowest cost borrowing option for students, and these interest rate decreases will make paying for college slightly more affordable for many.

Rate changes only occur for new borrowers, and the interest rates are announced once a year. Given that these rates are fixed for the life of the loans, a decrease can be beneficial for a long period of time.

New Federal Student Loan Rates For 2019 – 2020 

From July 1, 2019 to June 30, 2020, the rates on Federal student loans will be:

  • Undergraduate Subsidized and Unsubsidized Direct Loans: 4.53%
  • Graduate Direct Loans: 6.08%
  • Graduate and Parent PLUS Loans: 7.08%

These represent a sizable decrease in interest rates. Previously for 2018 – 2019, the rates were:

  • Undergraduate Subsidized and Unsubsidized Direct Loans: 5.05%
  • Graduate Direct Loans: 6.6%
  • Graduate and Parent PLUS Loans: 7.6%




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