Federal student loan interest rates are heading higher for the 2026-27 academic year, following Monday's May 10-year Treasury Note auction (PDF File). Undergraduate Stafford Loans will carry a 6.52% fixed rate, up from 6.392% a year earlier, with graduate and PLUS borrowers seeing similar increases of roughly 13 basis points.
The new rates apply to federal student loans disbursed on or after July 1, 2026, and remain fixed for the life of the loan.
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The New Rates For 2026-27 Academic Year
The May 12 Treasury auction produced a high yield of 4.468%, which serves as the base for the federal student loan rate formula. Adding the statutory margin for each loan type produces the 2026-27 rates:
- Federal Direct Stafford Loan (Undergraduate): 6.52%
- Federal Direct Stafford Loan (Graduate): 8.07%
- Federal Direct Grad PLUS Loan: 9.07%
- Federal Direct Parent PLUS Loan: 9.07%
All four rates remain below their respective statutory caps of 8.25% for undergraduate Stafford, 9.50% for graduate Stafford, and 10.50% for PLUS loans.
It's important to remember that Grad PLUS Loans are only being issued to existing grandfathered-in students.
And these rates are very in-line with historical averages.
Year-Over-Year Change
Every loan type is moving up by about the same amount (roughly 0.13 percentage points) reflecting the modest rise in the May 10-year Treasury yield compared to last year's auction.
Loan Type | 2025-26 Rate | 2026-27 Rate | Change |
|---|---|---|---|
Undergraduate | 6.39% | 6.52% | +0.13% |
Graduate | 7.94% | 8.07% | +0.13% |
Grad PLUS | 8.94% | 9.07% | +0.13% |
Parent PLUS | 8.94% | 9.07% | +0.13% |
The change is small in isolation, but it compounds across a 10-year standard repayment plan and even more on extended or income-driven repayment timelines.
What This Means For Borrowers
For an undergraduate borrowing the full $5,500 annual limit at 6.52% on a 10-year standard repayment plan, total interest costs would run about $1,991 over the life of that single year's loan.
Parent PLUS borrowers face the steepest absolute rate at 9.07%, along with the standard 4.228% origination fee that applies to PLUS disbursements, a combination that continues to make Parent PLUS one of the more expensive federal borrowing options.
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Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.