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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