How Much More Will You Pay? The Truth About 2024 Federal Student Loan Rates

So, you’re thinking about taking out a federal student loan—or maybe you already have one—and you’re wondering, “What’s up with these interest rates?” Good question! Understanding how interest works can actually save you a bunch of money down the road.

Here’s the scoop on the interest rates for federal student loans for the 2024–2025 school year — and what it means for you.

The Basics: What Are Federal Student Loans?

Federal student loans are basically money the government lets you borrow to pay for college or grad school. The nice thing about them is they usually have lower interest rates than private loans, plus flexible repayment options.

But not all federal loans are created equal. Different loans come with different interest rates, so let’s break it down.

The Current Interest Rates (2024–2025)

These rates are “fixed,” meaning once you get the loan, the rate won’t change — which is great because you know exactly what you’re dealing with. Here’s what they look like now:

• 6.53% for undergrad Direct Subsidized and Unsubsidized Loans

• 8.08% for graduate and professional student Direct Unsubsidized Loans

• 9.08% for Direct PLUS Loans (these are for parents or grad students)

These numbers are a bit higher than they’ve been recently, mostly because interest rates all around the economy have been going up.

What Does That Mean for You?

• Direct Subsidized Loans: These are for undergrads who prove they need financial help. The best part? The government actually pays your interest while you’re in school. So your loan balance doesn’t grow while you’re focusing on classes.

• Direct Unsubsidized Loans: These are for undergrads and grads who don’t necessarily show financial need. But here’s the catch — interest starts adding up right away, even while you’re still in school, and you’re on the hook for paying it.

• Direct PLUS Loans: These loans are for parents or grad students and have the highest rates. Plus, there’s a credit check. You’re responsible for all the interest, so these can get pricey.

Why Should You Care About Interest?

Interest is basically the cost of borrowing money. Even a small difference in the interest rate can add up to hundreds or thousands of dollars over time.

The good news? Federal loans have fixed interest rates. So no surprise hikes later — what you see is what you get.

A Few Other Things to Keep in Mind

• There are usually origination fees taken out when you get the loan, so the amount you actually get might be a bit less than what you borrowed.

• Federal loans come with a bunch of repayment options, including plans where your payments are based on your income, which can make things easier if money’s tight.

• If you don’t pay the interest as it piles up on some loans, it can get added to your loan balance — meaning you’ll owe even more later.

Quick Look: Interest Rates by Loan Type

If you’re borrowing federal student loans, it’s super important to understand these interest rates because they affect how much you’ll pay back in the long run.

If you want help figuring out your options or understanding repayment plans, just say the word. I’ve got your back!