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Student Loan Interest Rates 2024

Currently, student loan rates are some of the lowest seen in U.S. history. However, you still need to consider certain things before proceeding with the student loan debt, even though it looks attractive now. 

Also, federal student loan interest rates are set every year. But private student loan rates can change at any time. And that’s why it’s essential to review current rates now and then to increase your chances of getting an affordable loan. 

With that said, let’s find out the current student loan rates and other relevant information. 

What Are the Current Student Loan Interest Rates? 

The 10-year Treasury rate saw the lowest records in 202. And due to that, the federal student loans starting from July 1, 2020, are one of the lowest we’ve seen in history. According to the Federal Student Aid, here are the rates for the various types of student loans: 

  • Direct Subsidized Loans for undergraduates – 2.75%
  • Direct Unsubsidized Loans for professional and graduate borrowers – 4.30%
  • Direct PLUS loans for graduates, parents, or professional students – 5.30%

Keep in mind that there’s an origination fee of 4.228% for parent PLUS Loans and 1.057% for Federal Direct Subsidized Loans and Unsubsidized Loans. These fees aren’t included in your repayment. Instead, it’s deducted from your first loan disbursement. 

Private loan lenders determine the range of interest rates. So your actual rate will depend on your creditworthiness and your cosigner. According to Bankrate, the annual percentage rates (APR) for private student loans are currently: 

  • Undergraduate and Graduate: Fixed APR – 3.34% to 12.99%, Variable APR – 1.04% to 11.98% 
  • Refinance: Fixed APR: 2.59% to 7.63%, Variable APR: 1.90% to 6.86% 

According to the Federal Reserve announcement, they’ll be keeping the federal funds rate near zero for the foreseeable future. 

So there’s a chance that private loan rates will increase considerably in 2023. That means you have a good chance of private student loan relief

How Does Student Loan Interest Rates Work? 

How the loan interest rate works depends on whether the loan is federal or private. For federal student loans, every borrower that takes out the same loan type in a year gets the same interest rate. 

For private loans, you usually get low interest rates when your credit scores are high. 

1. Federal Student Loans

  • Congress determines the interest rates every year based on the 10-year Treasury note. 
  • Most of the fees are charged as a percentage of the overall student loan amount. 
  • The interest rates are fixed for the life of the loan 

2. Private Student Loans

  • Typically, the interest rates are credit-based 
  • You can opt for fixed or variable interest rate 
  • Most private loan lenders don’t require origination fees 
  • Variable interest rates can change monthly or quarterly 

Student Loan Interest Rates – Eligibility Criteria

Like any other loan, student loans also have particular eligibility criteria that all the students need to meet who are willing to apply for loan. If you meet all the eligibility criteria, the Student loan Interest rate will be comparatively less. Let’s have a look at the eligibility criteria.

  1. Applicants should be citizens of India.
  2. Applicants must have successfully completed their school or higher education. 
  3. Applicants must have original mark sheets.
  4. Applicants must have the admission letter of the college.
  5. A detailed fee structure of the college is required.
  6. College should be recognized by the authorized body.
  7. Income documents or salary slips of the parents should also be ready. 

Documents Required for Student Loan

  1. KYC Document
  2. Bank Statement
  3. Guarantor form
  4. Admission letter along 
  5. Fees structure
  6. Marksheets of HSC/ Graduation

How Does The Student Loan Interest Calculation Work? 

Federal student loans and most private loans use a simple interest formula to calculate the student loan interest. 

Here’s how it works: you multiply your outstanding principal balance by the interest rate factor. Then you multiply the results you get by the number of days since your last payment. 

Interest Amount = (Outstanding Principal Balance x Interest Rate Factor) x Days since your last payment.

The interest rate factor calculates the amount of interest that accumulates on your student loan. You can determine it by dividing the interest rate on your student loans by the number of days in the year. 

Factors that Determine Student Loan EMI

There are many factors affecting student loans. The factors are listed below:

1. Eligibility 

Candidates must meet all the eligibility criteria required for approval of the loan. Otherwise, the loan will not be provided. 

2. Student Loan Interest Rate

Student loan Interest rate also affects the student loans. The high Student loan Interest rate can be a problematic thing while repaying the loan. It’s better to opt for low Student loan Interest rates.

3. Loan Amount

The amount of loan also affects the Students loan equally because the amount you are taking on the loan needs to be repaid with a student loan interest rate in the future.

4. Tenure for Repaying of the Loan

The tenure you choose decides the EMI of the student loan.

How Biden Could Change Student Loans?

President Biden proposed the student loan policies that could change student loans big time moving forward. The proposed guidelines include: 

  • Revising the IDR plans to not exceeding 5% of the borrower’s discretionary income 
  • Increasing the Pell Grants value
  • Public universities providing free tuition for years for borrowers with household income below $125,000
  • Two years of free community college
  • Biden will Forgive $10,000 of student debt each year, borrowers join in the community or national service, up to five years. 

Until then, you can rely on various student loan forgiveness programs to get rid of your debt. 


Before you decide to pay off your student loans, we recommend that you contact a student loan expert or can visit Financegab.com. They will give you the necessary direction you need depending on your current situation. Through that, you can get out of debt once and for all. 

Student Loan Interest Rates – FAQs

Q1. What is covered under a student loan?

Ans. The student loan covers entire college fees, accommodation expenses, and other miscellaneous expenses. 

Q2. What is student loan EMI and how is it calculated?

Ans. The Equated Monthly Installments (EMI) depends on the principal account and the student loan interest rate. EMI will be calculated according to the tenure you have chosen for the repaying of the loan.

Ajeet Sharma, the founder of Financegab and a well-known name in the field of financial blogging. Blogging since 2017, he has the expertise and excellent knowledge about personal finance. Financegab is all about personal finance which aims to create awareness among people about personal finance and help them to make smart, well-informed financial decisions.


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