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Federal student loan rates to increase starting July 1

Federal student loans, which will be at some of the lowest interest rates of the last decade, will be more expensive for the 2021-22 school year.

Interest rates for undergraduate student loans will rise from 2.75% to 3.73% for 2021-22. These rises are a result of the U.S. Treasury Department’s May auction of 10-year notes, according to New America, a public policy think tank.

Interest rates for the 10-year notes decreased last year when investors sought the safety of federal debt as the pandemic began. Because of this, federal student loan interest rates dramatically dropped in 2020.


Since last year investors have now moved their money away from federal debt which has pushed interest rates back up.

Despite interest rates for student loans increasing, they are still low compared to the last decade.

Due to interest rates being fixed, any loans taken out before July 1 of this year will still have the academic year’s 2.75% interest rate.



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