Student Loan Interest Rates in January 2020
See current student loan interest rates for federal student loans, private student loans, and student loan refinancing.
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Interest rates for student loans change all the time. Whether due to changes in the market or the government—it’s important to stay on top of the current student loan rates.
If you are looking for a new student loan to pay for school or are considering refinancing your existing loans, knowing the current interest rates can help you make an educated decision on which lender to choose.
Below you will find interest rates for federal student loans, private student loans, and student loan refinancing.
On this page:
- Federal Student Loan Interest Rates
- Private Student Loan Interest Rates
- Student Loan Refinancing Interest Rates
- More Information About Student Loan Interest Rates
Current & Historic Federal Student Loan Interest Rates
Since 2013, all federal student loan interest rates have been set based on the 10-year Treasury note. To learn more about how these rates are set, read the How Congress Sets Federal Student Loan Interest Rates section below.
In the following table you will find the current and historic federal student loan interest rates. These rates coincide with the academic year that the loans were taken out (ex: Fall 2016 to Spring 2017).
It should be noted that all of these are fixed rates, meaning that they do not change over time.
| Loan Type | 2019-20 | 2018-19 | 2017-18 | 2016-17 | 2015-16 | 2014-15 | 2013-14 |
| Direct Subsidized (Undergrad) | 4.53% | 5.05% | 4.45% | 3.76% | 4.29% | 4.66% | 3.86% |
| Direct Unsubsidized (Undergrad) | 4.53% | 5.05% | 4.45% | 3.76% | 4.29% | 4.66% | 3.86% |
| Direct Unsubsidized (Grad) | 6.08% | 6.60% | 6.00% | 5.31% | 5.84% | 6.21% | 5.41% |
| Direct PLUS (Grad & Parent) | 7.08% | 7.60% | 7.00% | 6.31% | 6.84% | 7.21% | 6.41% |
Current Private Student Loan Interest Rates
Unlike federal student loans, private student loan interest rates change much more than once a year. Private banks and lenders that offer these loans constantly update rates depending on the market.
It is also important to know that these lenders offer different rates depending on a variety of factors. The most important of these factors is creditworthiness. The better your credit score (or your cosigner’s credit score), the lower the interest rate you will receive.
Below you will find current private student loan interest rates for some of the top lenders in the industry. If you are interested in learning more about our top choices, check out our Best Private Student Loans guide.
Undergraduate Private Student Loan Interest Rates
| Lender | Variable APR | Fixed APR |
| PNC | 4.94% – 10.10% | 5.58% – 11.79% |
| College Ave | 4.20% – 11.44% | 5.29% – 12.78% |
| SunTrust | 4.38% – 13.38% | 5.35% – 14.05% |
| Sallie Mae | 4.62% – 11.47% | 5.74% – 11.85% |
| Citizens Bank | 3.12% – 11.22% | 5.74% – 11.99% |
Graduate Private Student Loan Interest Rates
| Lender | Variable APR | Fixed APR |
| PNC | 5.03% – 11.23% | 6.01% – 12.29% |
| College Ave | 4.07% – 9.37% | 5.29% – 10.45% |
| SunTrust | 4.38% – 9.35% | 5.35% – 9.88% |
| Sallie Mae | 4.87% – 10.23% | 6.25% – 10.23% |
| Citizens Bank | 3.12% – 10.87% | 5.74% – 11.75% |
Parent Private Student Loan Interest Rates
| Lender | Variable APR | Fixed APR |
| College Ave | 4.07% – 9.05% | 6.62% – 11.58% |
| Sallie Mae | 4.50% – 10.87% | 5.74% – 12.87% |
| Citizens Bank | 5.43% – 8.75% | 5.95% – 6.55% |
Current Student Loan Refinancing Interest Rates
Like new private student loans, student loan refinancing is offered by private banks and lenders—not the government—as a way for borrowers to lower their interest rates to save on repayment.
When you refinance your student loans, your old loans will be paid off and you will be issued a new loan with a new interest rate and term length. Aside from receiving a lower rate, some borrowers may also refinance to extend their repayment terms to make repayment more manageable.
>> Read More: Should I Refinance My Student Loans?
Regardless of why you may want to refinance, you can find the current student loan refinancing interest rates for the top lenders in the industry in the following table.
| Lender | Variable APR | Fixed APR |
| SoFi | 2.47% – 6.99% | 3.90% – 7.98% |
| College Ave | 2.88% – 7.63% | 3.25% – 8.00% |
| Citizens Bank | 3.00% – 9.74% | 3.90% – 9.99% |
| LendKey | 2.68% – 8.96% | 5.10% – 8.93% |
| Earnest | 2.57% – 6.97% | 3.89% – 7.89% |
| CommonBond | 2.61% – 7.35% | 3.67% – 7.25% |
| ELFI | 2.80% – 6.01% | 3.39% – 6.69% |
How to Calculate How Much Interest You Will Owe
Every month, the interest amount you owe on your loan is recalculated using a daily interest formula:
Interest amount = Outstanding principal balance x Number of days since last payment x Interest rate factor
The interest rate factor is your annual interest rate divided by the number of days in the year. Your loan servicer is responsible for billing you monthly and explaining how your payments are applied to your principal balance.
Differences Between Variable, Mixed, and Fixed Interest Rates
If you are a student (or the parent of a student) taking out or refinancing a student loan for the first time, you’ll need to understand the different types of interest rate options you have.
All federal student loans taken out in 2006 or on have fixed interest rates but private student loans (including refinance loans) may have fixed, variable, or hybrid/mixed rates.
Fixed Interest Rates
The interest rate you pay remains stable over the life of the loan. This means your monthly payments won’t change until the loan is paid off, forgiven, or refinanced.
Pros
- Certainty: You know exactly how much interest you’ll pay each month, so it’s easier to budget. Also, you won’t be affected if interest rates climb after you take out your loan.
Cons
- Cost: In most cases, the interest rate on a fixed loan will be higher in the early years than are the introductory rates on a variable loan. Thus, you may pay out more money in the short term with a fixed-rate loan and possibly in the longterm as well.
- Falling Rates: If you take out a fixed-rate loan during a time when interest rates are high, those rates are locked in unless you refinance the loan when interest rates drop.
Variable Interest Rates
Variable rates—which are only offered by private lenders—change over time based on a market rate, such as LIBOR or the federal funds rate.
The new interest rate applies for the reset period, which can be a month, several months, or a year. For example, interest on a variable-rate student loan with a term length of 20 years with an annual reset period would be recalculated every year and apply for the following 12 months.
Rates might go up, down, or remain unchanged depending on economic conditions, the lender’s costs, and prevailing interest rates.
Pros
- Cost: The initial interest rate on a variable loan is usually lower. This makes it easier to afford during the first year. In addition, if the base rate remains steady, the overall cost of the student loan over its lifetime might be lower.
- Caps: Many of the private student loans with variable rates have annual and lifetime caps on interest rates, which protects you during times of wild inflation.
Cons
- Uncertainty: It’s harder to predict your monthly payment amount, which can confound your budgeting efforts.
- Cost: You will pay much more with a variable rate loan if the base rate rises substantially. Caps help, but some loans have outrageously high caps that don’t really protect you that much.
>> Read More: Fixed vs. Variable Rate Student Loans
3) Mixed/Hybrid Interest Rates
Mixed-rate student loans are hybrids, with an initial multi-year (usually five years) fixed-rate period followed by a variable-rate period for the remainder of the loan’s lifetime. These loans are very uncommon and are only offered privately.
Pros
- Certainty Early On: Mixed-rate loans provide certainty during the early years when students experience dynamic employment conditions and convert to variable-rate loans at a time when, hopefully, borrowers are financially better able to handle the possibility of higher rates.
Cons
- Uncertainty Longterm: Mixed-rate loans can be the most expensive variety if your luck runs bad. First, you start off paying a fixed rate that is higher than the rate on a comparable variable loan. Then, if prevailing rates are high when you enter the variable phase, you’ll be paying more than you would have for the fixed-rate loan. That’s a double whammy that could cost you dearly.
How Congress Sets Federal Student Loan Interest Rates
Have you ever wondered who sets the interest rates on your student loans? The answer is Congress, which passed the Higher Education Act in 1965 and has subsequently renewed and amended it several times.
The law governing the setting of interest rates on federal student loans is set down in the U.S. Code, in Sections 20 U.S.C. § 1077 and § 1087. Congress passes legislation to set the interest rates, which are updated every year and apply from July 1 of Year 1 to June 30 of Year 2.
In August 2013, the Bipartisan Student Loan Certainty Act was signed into law, tying federal student loan interest rates to prevailing market rates.
In their current form, the interest rate levels for the various types of federal student loans are based on the yield of the 10-year Treasury Note auction, plus an increment.
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Good and amazing information about low interest rate loans and i am hoping that you keep on sharing such kind of useful information daily….
how can I apply for this students loan? is there website that I will enter and follow the instructions for the application?
Hey Agera,
Below is an article that will give you some more information on the best private student loans available:
https://lendedu.com/blog/private-student-loans/