Interest rates for federal loans taken out on or after July 1, 2018 will have a significantly higher interest rate than last year.

The new fixed rates will be as follows:

Loan Type 2017-18 Rate 2018-19 Rate
Undergraduate Stafford 4.45% 5.045%
Graduate Stafford 6.00% 6.595%
Parent PLUS 7.00% 7.595%
Graduate PLUS 7.00% 7.595%


What it means for borrowers

This increase will result in an approximate increase of 2.8% in monthly payments over a 10-yr term.

Borrowers’ existing federal student loans are not affected, as these rates only affect newly disbursed loans.

While the Department of Education has yet to formally announce this increase, student loan expert Mark Kantrowitz was able to project these rates based on the high yield of the 10-year Treasury Note auction on May 9.