What is the interest rate on a unsubsidized student loan

Q: Are unsubsidized loans a good idea?

If subsidized student loans wont cover the entire cost of your education, or if you simply cant prove financial need, then unsubsidized loans are the way to go. Although youll be paying more in interest, youll still have many payment options available after you graduate.

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Federal Student Loan Interest Rates in 2022-23
How Do These New Rates Affect Borrowers?
Should You Borrow Private Student Loans?
Compare Personalized Student Loan Rates
For more interest rate information:
Is it better to get subsidized or unsubsidized loans?
Are unsubsidized loans a good idea?
What is the normal federal student loan interest rate?
What is the interest on 2022 2023 student loan?

Borrowing federal student loans is about to get more expensive.

Federal student loan interest rates are tied to the 10-year Treasury note and determined using a formula set by federal law. After Wednesday’s 10-year Treasury note auction, interest rates are set to rise for the 2022-23 academic year.

The new fixed interest rates will be:

4.99% for direct subsidized and unsubsidized undergraduate loans
6.54% for unsubsidized graduate loans
7.54% for grad and parent PLUS loans

The most recent rates, which only apply to new loans taken out for the specified school year, will take effect on July 1, 2022.

Federal Student Loan Interest Rates in 2022-23

The new federal interest rates are rising to prepandemic levels. Here’s how they compare to federal student loan rates over the last five years.

But what do those rate increases look like in real dollars? Say, for example, that you borrow $5,500 in unsubsidized loans—the maximum amount allowed for first-year undergraduates. At last year’s rate of 3.73%, you’d owe about $55 a month and pay a total of $1,497 in interest over a 10-year repayment period.

If you borrowed the same amount at the new rate of 4.99%, you’d pay an additional $3.33 per month in interest, adding up to almost $400 more over the life of the loan.

How Do These New Rates Affect Borrowers?

If you already have federal student loans, these increased rates won’t change anything—they only apply to new loans that students borrow for the upcoming school year.

If you plan to borrow student loans in the next year, review your options. For many borrowers, federal student loans are likely still the best choice available. Most types of federal student loans don’t require a credit check, and everyone who qualifies receives the same interest rate. That’s a big plus for students and young adults who may not have a robust credit history yet.

In addition, federal loans come with added protection that you won’t find in the private market. You could be eligible for flexible repayment options, including income-driven repayment (IDR) plans and extended forbearance and deferment options. There are also several federal forgiveness programs that could help you discharge a portion of your debt if you qualify.

Lastly, federal student loan borrowers have received extra benefits during the Covid-19 pandemic. Payments have been paused and interest rates were set at 0% beginning in March 2020. While those perks are set to expire on August 31, 2022, private loan borrowers received no such benefits during that time.

Should You Borrow Private Student Loans?

There are cases where private student loans can be beneficial. For example, private loans typically come with higher borrowing limits, so if you max out your federal loan options you can still secure money for college by applying for private student loans.

Highly qualified borrowers (that is, those with strong credit and stable income) may also find better deals on the private market. Graduate students and parents of undergrads face the highest interest rates and origination fees on federal loans. If you have a healthy financial history, you could potentially qualify for lower rates and fees with private student loans.

But be sure to weigh any savings with the loss of federal student loan perks. If you later have trouble repaying your loans, a private lender may not do as much to help you.

Compare Personalized Student Loan Rates

Takes Up To 3 Minutes

Interest rates for Direct Subsidized or Unsubsidized Loans vary depending on loan type, when the loan was first disbursed, and your degree status (undergraduate or graduate).

Period loans first disbursed	Direct Subsidized	Direct Unsubsidized
Undergraduate	Graduate	Undergraduate	Graduate
7/1/22 - 6/30/23	4.99 percent	Not applicable	4.99 percent	6.54 percent
7/1/21 - 6/30/22	3.73 percent	Not applicable	3.73 percent	5.28 percent
7/1/20 - 6/30/21	2.75 percent	Not applicable	2.75 percent	4.3 percent
7/1/19 - 6/30/20	4.53 percent	Not applicable	4.53 percent	6.08 percent
7/1/18 - 6/30/19	5.05 percent	Not applicable	5.05 percent	6.60 percent
7/1/17 - 6/30/18	4.45 percent	Not applicable	4.45 percent	6 percent
7/1/16 - 6/30/17	3.76 percent	Not applicable	3.76 percent	5.31 percent
7/1/15 - 6/30/16	4.29 percent	Not applicable	4.29 percent	5.84 percent
7/1/14 - 6/30/15	4.66 percent	Not applicable	4.66 percent	6.21 percent
7/1/13 - 6/30/14	3.86 percent	Not applicable	3.86 percent	5.41 percent
7/1/12 - 6/30/13	3.4 percent	Not applicable	6.8 percent
7/1/11 - 6/30/12	3.4 percent	6.8 percent	6.8 percent
7/1/10 - 6/30/11	4.5 percent	6.8 percent	6.8 percent
7/1/09 - 6/30/10	5.6 percent	6.8 percent	6.8 percent
7/1/08 - 6/30/09	6 percent	6.8 percent	6.8 percent
7/1/06 - 6/30/08	6.8 percent	6.8 percent	6.8 percent
Prior to 6/30/06	Contact your loan holder to determine the interest rate

Military service members may be eligible for reduced interest rates.

If you need more information about the interest rate(s) for your student loans, contact your loan holder. If you aren't sure which institution or servicer holds your loans, locate your loan holder.

For more interest rate information:

Federal Perkins Loans
Direct PLUS Loans for graduate and professional students
Direct PLUS Loans for parents

Is it better to get subsidized or unsubsidized loans?

When it comes to subsidized and unsubsidized loans, subsidized loans are the clear winner. If you can qualify for them, you'll pay less money in interest charges with a subsidized loan, and you'll save money over the life of your loan. But not everyone will qualify for a subsidized loan.

Are unsubsidized loans a good idea?

If subsidized student loans won't cover the entire cost of your education, or if you simply can't prove financial need, then unsubsidized loans are the way to go. Although you'll be paying more in interest, you'll still have many payment options available after you graduate.

What is the normal federal student loan interest rate?

Data Summary. The current federal student loan interest rate for undergraduates is 4.99%. Unsubsidized and direct PLUS loans for graduate and professional students have fixed interest rates of 6.54% and 7.54%, respectively. Private student loan fixed interest rates are typically around 3.7-14%.

What is the interest on 2022 2023 student loan?

Here are the increased rates for federal student loans for the 2022-2023 academic year: Direct Subsidized Loans (undergraduates): 4.99% Direct Unsubsidized Loans (undergraduates): 4.99% Direct Unsubsidized Loans (graduate and professional students): 6.54%