May 17, 2023

Interest Rates on New Federal Student Loans Will Once Again Increase in July

Logan Johnson, Policy Associate
Policy and Advocacy


Last week, the U.S. Treasury Department made its annual move that will impact the interest levels borrowers pay on federal student loans – and those rates are increasing for the third consecutive year.

For about a decade, the interest rates on Federal student loans have been set annually according to the 10-year Treasury note rate, plus a fixed percentage that varies by loan type (e.g., subsidized Stafford, unsubsidized Stafford, PLUS). 

The results of last week’s 10-year Treasury note auction by the U.S. Treasury Department will mean an increase of more than half a percentage point for Federal student loans disbursed on or after July 1, 2023, and before July 1, 2024. The interest rates are fixed for the life of the loan. 

The table below shows a comparison of interest rates, which includes the new rates and those from the previous four academic years. Please note that pandemic relief measures currently in place mean that the interest rates of all federal student loans will remain paused at zero until 60 days after June 30, 2023 or until the Supreme Court makes a decision on student debt cancellation, unless there is new action by Congress or the Biden-Harris Administration in the coming month.

If you have questions about your student loans, utilize our free resource, AccessConnex, to speak with AccessLex Accredited Financial Counselors.

Federal Student Loan Interest Rates from 2019-20 to 2023-24

Loan Type 2019-20 2020-21 2021-22 2022-23 2023-24
Direct Subsidized (Undergraduate) 4.53% 2.75% 3.73% 4.99% 5.50%
Direct Unsubsidized (Undergraduate) 4.53% 2.75% 3.73% 4.99% 5.50%
Direct Unsubsidized (Graduate) 6.08% 4.30% 5.28% 6.54% 7.05%
Direct PLUS (Graduate and Parent) 7.08% 5.30% 6.28% 7.54% 8.05%

Note. All information is from the results of the 10-year Treasury note auction by the U.S. Treasury Department for the coinciding year.