New Fixed Rates for Federal Student Loans Start July 2025
Published Date: 3/2/2026
Notice
Summary
Starting July 1, 2025, new fixed-rate federal student loans will have updated interest rates that affect students borrowing under the William D. Ford Federal Direct Loan Program. These rates stay the same for the life of the loan, so borrowers know exactly what to expect. If you’re planning to take out a Direct Subsidized, Unsubsidized, or PLUS Loan between July 2025 and June 2026, these new rates will apply and impact your repayment costs.
Analyzed Economic Effects
6 provisions identified: 1 benefits, 4 costs, 1 mixed.
Undergraduate Direct Loan Rate 6.39%
If you take out a Direct Subsidized Loan or a Direct Unsubsidized undergraduate loan with a first disbursement on or after July 1, 2025 and before July 1, 2026, the fixed interest rate for the life of the loan will be 6.39%.
Graduate Direct Unsubsidized Rate 7.94%
If you take out a Direct Unsubsidized loan as a graduate or professional student with a first disbursement on or after July 1, 2025 and before July 1, 2026, the fixed interest rate for the life of the loan will be 7.94%.
Direct PLUS Loan Rate 8.94%
If you take out a Direct PLUS Loan (either as a parent of a dependent undergraduate student or as a graduate/professional student) with a first disbursement on or after July 1, 2025 and before July 1, 2026, the fixed interest rate for the life of the loan will be 8.94%.
Consolidation Loan Rate Calculation & Cap
For Direct Consolidation Loans based on applications received on or after February 1, 1999, the fixed interest rate equals the weighted average of the interest rates on the loans consolidated, rounded to the nearest higher one-eighth of one percent. For applications received on or after February 1, 1999 and before July 1, 2013, the rate may not exceed 8.25%; for applications received on or after July 1, 2013, there is no 8.25% cap.
Graduate Students Ineligible for Subsidized Loans
Graduate and professional students are not eligible to receive Direct Subsidized Loans.
Fixed Rates Stay Fixed for Life
Direct Subsidized, Direct Unsubsidized, and Direct PLUS Loans first disbursed on or after July 1, 2013 (and certain earlier fixed-rate loans) have fixed interest rates that apply for the life of the loan, so the announced rate does not change while you repay.
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Key Dates
Related Federal Register Documents
2025-15665 — William D. Ford Federal Direct Loan (Direct Loan) Program
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2026-13799 — Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; Income Driven Repayment Plan Request for the William D. Ford Federal Direct Loans and Federal Family Education Loan Programs
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2026-13647 — Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; William D Ford Federal Direct Loan Program Repayment Plan Selection Form
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2026-13286 — Accountability in Higher Education and Access Through Demand- Driven Workforce Pell: Student Tuition and Transparency System (STATS) and Earnings Accountability
Starting July 1, 2027, colleges must prove their programs help students earn enough money to keep getting federal student loans. This new rule affects schools offering Direct Loans and aims to stop loans for programs where graduates don’t make enough. Some parts kick in earlier on August 31, 2026, so schools better get ready to show they’re helping students succeed in the workforce!
2026-13248 — International Education Programs and Fulbright-Hays Program; Recission of Regulations
The Department of Education wants to cancel the current rules for International Education and Fulbright-Hays programs to stay flexible and better match today’s education and workforce needs. This change affects schools and organizations involved in these programs and aims to help the Department update priorities without being tied down by old regulations. People have until July 31, 2026, to share their thoughts before the change happens.
2026-13179 — Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; Joint Consolidation Loan Separation Application
The Department of Education is updating the form people use to split their joint student loan. This change affects borrowers with joint consolidation loans and aims to make the process clearer and easier. You’ve got until July 30, 2026, to share your thoughts, and about 20,000 folks use this form each year.
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Next: 2026-04066 — Annual Notice of Interest Rates for Variable-Rate Federal Student Loans Made Under the Federal Family Education Loan Program Prior to July 1, 2010
If you have an old federal student loan made before July 1, 2010, your interest rate for the next year (July 1, 2025 to June 30, 2026) has been set. These rates can change every year and affect how much you pay. This notice tells you the new rates so you can plan your budget and payments with confidence.