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|
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.