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The interest rates on federal student loans are likely to slightly increase in the 2026-27 academic year, according to an exclusive analysis provided to CNBC by higher education expert Mark Kantrowitz.
Federal student loan rates are typically fixed for the life of the loan. An uptick in interest rates will make it more expensive to cover college costs.
The higher rates are set to take effect as the One Big Beautiful Bill Act eliminates several affordable student loan repayment plans and other relief options for borrowers who are financially struggling.
More than 42 million Americans hold student loans, and collectively, outstanding federal education debt exceeds $1.6 trillion.
Here’s what to know.
Expected student loan interest rates for 2026-27
The government sets interest rates on its education loans once a year. The rates, which run from July 1 to June 30 of the following year, are tied in part to the May auction of the 10-year Treasury Note.
Kantrowitz based his calculations on the Treasury Department’s announced high-yield rate of 4.47% on Tuesday.
Using that result, Kantrowitz estimated the interest rate on federal direct undergraduate loans could be 6.52% in the 2026-27 academic year. The undergraduate rate for the 2025-26 year is 6.39%.
At those new undergraduate rates, every $10,000 a family borrows would result in a $113.64 monthly student loan payment after graduation, assuming the student enrolled in a 10-year Standard Repayment Plan, Kantrowitz calculated. With interest, the borrower would repay $13,636.75 over that decade, or $76.84 more than they would at the current rate.
For graduate students, loans will likely come with an 8.07% interest rate, compared with the current 7.94%, Kantrowitz found.
Parent PLUS loans may have a 9.07% interest rate, an increase from 8.94% now, he said.
It’s unclear when the U.S. Department of Education will officially announce the new rates.
Which borrowers face higher rates
All federal education loans issued on or after July 1, 2026, will be subject to the new rates.
Most federal student loan rates are fixed, meaning the rates on existing loans won’t change. Loans are also tied to the academic year, so families can’t try to borrow now to get ahead of the rate increase.
The rate changes apply only to federal student loans. Private loans come with their own — often higher — interest rates, typically based on factors such as creditworthiness and the borrower’s ability to secure a co-signer.
