The Department of Education confirmed today that federal student loan interest rates for the 2026-2027 academic year will decrease to 4.5 percent for undergraduate borrowers, down from 5.05 percent in the current cycle.
Graduate student loans will carry a rate of 6.0 percent, while Parent PLUS loans drop to 7.0 percent. The rates are tied to the 10-year Treasury note yield from the May auction plus a fixed margin set by Congress.
Financial aid experts recommend that students who locked in higher rates in recent years explore consolidation options, though they caution that consolidating federal loans can reset progress toward forgiveness programs.
