Interest rates on federal student loans could increase by 1%

As a result, federal student loan rates could increase by about 1% in the 2024-2025 academic year, according to an estimate from higher education expert Mark Kantrowitz.

“It’s a pretty big step,” Kantrowitz said.

Here’s what borrowers need to know.

All federal student loans issued on or after July 1, 2024 will be subject to the new rates.

Sorry, families: You can’t try to escape the rate increase by borrowing before this deadline. Loans for the 2024-25 academic year must be taken out after July 1.

Don’t worry about loans you took out in previous college years: Most federal student loan rates are fixed, meaning the rates on these existing loans won’t change.

The rate changes only apply to federal student loans. Private loans come with their own, often higher, interest rates.