Federal student loans are getting more expensive. Here’s how high new interest rates are

Are you heading to college this fall? Your federal student loans are about to get more expensive.

Federal student loan interest rates are the highest they’ve been in a decade.

As of July, undergrads with new direct federal loans will have an interest rate of 5.5%, up from 4.99%, according to the Education Department’s Federal Student Aid office.

Graduate students will have a 7.05% interest rate and 8.05% for PLUS loans. Those loans have never been this high.

These rates are fixed, meaning they won’t change while you’re repaying.

If you already have loans, this increase doesn’t impact those.

The interest rates are determined by the high yield of the 10-year Treasury notes auctioned last week, plus an add-on percentage that varies depending on the loan and who it’s for.

Here’s how these new rates break down.

For example, NerdWallet reports: Let’s say you take out $31,000 in unsubsidized federal direct loans at 5.5%. Under a 10-year repayment plan, you’d pay almost $50,000. Three years ago with a 2.75% interest rate, you would’ve paid about $39,500.

Here are the rates for the 2023-24 school year:

• Direct subsidized loans and direct unsubsidized loans for undergraduates: 5.5%

• Direct unsubsidized loans for graduate and professional students: 7.05%

• Direct PLUS loans for parents of dependent undergraduate students and graduate or professional students: 8.05%