Federal Student Loan Interest Rate for 2023-24

2023-24 Federal Student Loans Interest RatesThe Federal Direct Student Loan interest rates for the school year 2023-24 have been determined by the government and they will be higher for the school year 2023-24.   This will be for new federal loans disbursed between July 1, 2023, and June 30, 2024. The net increase is 0.50  from last year’s rate.  The 2022-23 rates were slightly higher after years of lower rates due to COVID and the historically low 10-year treasury rates.

These are the rates for new federal student loans.  Under the National Forbearance program due to COVID current loans have a 0% interest rate until 9/1/2023.  Under the current President’s Executive order, this will expire by 9/1/2023.

Families and students who are considering using Federal Direct Loan for the 2023-24 school year will be charged the interest rates below.  Borrowers need to understand how these rates are calculated and the impact of long-term student debt. It’s important to keep in mind that while the rates change every year, these changes will only affect loans during the upcoming period.  These have no effect on previous loans or future borrowing. 

The federal student loan interest rates change each year on July 1st. The interest rate is based on the May 10 Year Treasury Note auction each year plus the Department of Education add-on fees.  This year’s May auction resulted in an interest rate of 3.448% versus a May 2022 rate of 2.84%

This student loan interest rate impacts direct subsidized, direct unsubsidized, direct graduate, and direct plus loans. The interest rates are fixed for the life of the loan based on the loan type borrowed. If the federal loans are consolidated, then the new federal consolidated loan will have a new interest rate.  It is a weighted average using the average of the loan balance and the associated interest rate for each loan. 

To learn more about all types of loans available, please read our comprehensive article on student loans.

In addition to the interest rate, there are processing fees associated with these loans, and these fees change depending on the type of loan the student or parent is using.

The chart below provides the new effective interest rates for Direct Federal Loans disbursed starting July 1, 2022, and before June 30, 2023.


2023-24 Federal Student Loan Interest Rates Chart

Private Student Loan Alternative 

Some families may benefit by using a private student loan.  The biggest advantage to using a private student loan is that it does not have the federal loan fee.  It also requires normal loan underwriting which could impact your final interest rate.  Here is a list of PayForED’s current preferred private lenders.  These rates change based on market conditions.

Variable Rates: 5.09%- 15.99% (APR)*

Fixed Rates: 4.44% - 15.99% (APR)*

*Rates includes .25% Auto Pay Discount

Variable Rates*: 6.12% – 16.45%

Fixed Rates*: 4.50% - 15.49%

*Lowest rates shown included auto debit discount

Variable with ACH: 6.15%- 16.08%

Fixed with ACH: 4.48% - 15.81%

Variable Rates: 4.98% - 12.79% (APR)*

Fixed Rates: 4.48% - 12.29% (APR)*


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