As of June 2025, the best interest rates on private student loans started around 3.19% for fixed-rate loans and between 4% and 5% for variable-rate loans. For federal student loans, rates in recent years have ranged from 2.75% to 6.54% for undergraduate borrowers. For the 2025-2026 school year, rates on undergraduate loans are set at 6.39%.

The Department of Education will resume student loan interest payments on Aug. 1, slamming President Biden for using loan forgiveness to sway votes.

Federal student loan rates dropped slightly for the 2025-26 school year, but are they the most affordable option?

For example, let’s say you owe $28,950 in student loans with an 8% interest rate. If you could refinance to a 6% rate, you’d save $3,059 in interest charges over a 10-year repayment term.

The federal cap on the amounts people can borrow means some of them will fall short. That’s especially true for students in professional schools.

Monthly payments could drop, but most borrowers will pay more in interest over time. What to expect now that President Trump's "Big Beautiful Bill" is law.

The Department of Education's announcement gives borrowers just weeks to consider their options before interest begins accumulating on their loans.