Having a student loan cosigner is a great way to get approved for a private student loan and qualify for a lower interest rate. A cosigner can be any responsible adult who fits the criteria. Look for a lender that offers cosigner release as a way to relieve your cosigner of their responsibility once you’ve made a series of on-time payments.
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What Is the Average Student Loan Interest Rate?
If you’re planning to take out student loans, or you are comparing private and federal student loans, you’re probably curious as to what the “average student loan interest rate” is.
The average student loan interest rate is different for federal student loans and private student loans. Federal student loan rates are fixed and rates are updated once a year, whereas private student loan rates may change at any time, offer fixed and variable rates, and actual rate will be based on a borrower’s credit history.
Current Student Loan Interest Rates
| Loan Type | Interest Rate |
|---|---|
| Private Student Loans | Starting at 0.99% to 14.50% |
| Federal Direct Stafford Student Loans for undergraduate students | 3.73% for loans first disbursed between July 1, 2021 through June 30, 2022 |
| Federal Direct Stafford Student Loans for graduate or professional students | 5.28% for loans first disbursed between July 1, 2021 through June 30, 2022 |
| Direct PLUS Loan | 6.28% for loans first disbursed between July 1, 2021 through June 30, 2022 |
Average Private Student Loans Interest Rate 2022
For the period of 2019 through 2020, we estimate the average private student loan interest rate to be 7.12%. This estimate is based on the past two years of publicly available data (primarily weighted average borrower interest rates published in investor reports*).
Current variable private loan APR rates are as low as 0.99%. Rates may be very different from one lender to the next, and usually variable rates have a lower starting point than fixed rates. A creditworthy cosigner may help you qualify for a lower rate.
Compare Featured Lenders
- Variable Rates: 1.13% APR - 11.23% APR. Fixed Rates: 3.50% APR - 12.60% APR. Lowest rates shown include the auto debit discount.1
- Choose from multiple repayment options, including no payments while in school1
- No origination fee or prepayment penalty2
- Cover up to 100% of your school-certified college expenses like tuition, fees, books, housing, meals, travel, and even a laptop for the entire school year3
- The only undergraduate student loan that offers 4 months of Chegg® study help 4
This loan is for undergraduate students at participating degree-granting schools. Students who are not U.S. citizens or U.S. permanent residents must reside in the U.S., attend a participating school in the U.S., apply with a creditworthy cosigner (who must be a U.S. citizen or U.S. permanent resident) and provide an unexpired government-issued photo ID to verify their identity. Applications are subject to a requested minimum loan amount of $1,000. Current credit and other eligibility criteria apply.
1Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. Payments may be required during the grace/separation period depending on the repayment option selected. Variable rates may increase over the life of the loan. Advertised variable rates reflect the starting range of rates and may vary outside of that range over the life of the loan. Advertised APRs assume a $10,000 loan to a borrower who attends school for 4 years and has no prior Sallie Mae loans. The borrower or cosigner must enroll in auto debit through Sallie Mae to receive a 0.25 percentage point interest rate reduction benefit. This benefit applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment, if available for the loan.
2Although we do not charge a penalty or fee if you prepay your loan, any prepayment will be applied as outlined in your promissory note-first to Unpaid Fees and costs, then to Unpaid Interest, and then to Current Principal.
3Loan amount cannot exceed the cost of attendance less financial aid received as certified by the school. Sallie Mae reserves the right to approve a lower loan amount than the school-certified amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half time.
4This promotional benefit is provided at no cost to borrowers with undergraduate or parent loans with a first disbursement between May 1, 2021 and April 30, 2022. Borrowers are not eligible to activate the benefit until July 1, 2021. Borrowers who reside in, attend school in, or borrow for a student attending school in Maine are not eligible for this benefit. Chegg Study® offers expert Q&A where students can submit up to 20 questions per month. No cash value. Terms and Conditions apply. Please visit http://www.chegg.com/legal/smtermsandconditions for complete details. This offer expires one year after issuance.
Information advertised valid as of 12/27/2021
SALLIE MAE RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS, SERVICES, AND BENEFITS AT ANY TIME WITHOUT NOTICE. CHECK SALLIEMAE.COM FOR THE MOST UP-TO-DATE PRODUCT INFORMATION.
Sallie Mae, the Sallie Mae logo, and other Sallie Mae names and logos are service marks or registered service marks of Sallie Mae Bank. All other names and logos used are the trademarks or service marks of their respective owners.
Sallie Mae loans are made by Sallie Mae Bank.
Edvisors is not the creditor for these loans and is compensated by Sallie Mae for the referral of Sallie Mae loan customers.
© 2021 Sallie Mae Bank. All rights reserved. SLM Corporation and its subsidiaries, including Sallie Mae Bank are not sponsored by or agencies of the United States of America.
- Competitive fixed and variable APRs starting at 0.94%1
- Multiple repayment options including: full principal and interest, interest-only, deferred, and flat payment
- Flexible payment terms ranging from 5, 8, 10, and 15 years2
- Coverage up to 100% of your school-certified cost of attendance ($1,000 minimum)3
- No origination, application and processing fees, no fees for early repayment
- Apply online in 3 minutes and get an instant credit decision
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
1Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
2This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
3As certified by your school and less any other financial aid you might receive. Minimum $1,000.
Information advertised valid as of 11/24/2021. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.
*Investor reports reviewed include, Sallie Mae, Wells Fargo, Discover, Citizens, PNC, SunTrust/Truist, Nelnet, Sofi, and College Ave
Average Federal Student Loan Interest Rate
Interest rates on federal student loans are fixed and based on degree level and the type of Direct Loan you borrow. Fortunately, in recent years, rates have dropped annually. See the chart below for current rates in effect for the 2020-2021 academic year. You can also check out our companion article on student loan interest rates dating back to the 2014-15 academic year.
Federal Student Loan Interest Rates for the Past 3 Years:
| Academic Year | Direct Loans (Undergraduate) | Direct Loans (Graduate) | Direct PLUS Loans (Parents and Graduate/Professional Students) |
|---|---|---|---|
| 2020-21 | 2.75% | 4.3% | 5.30% |
| 2019-20 | 4.53% | 6.08% | 7.08% |
| 2018-19 | 5.05% | 6.6% | 7.6% |
Student Loan Refinance Interest Rates: An Option to Lower Your Interest Rate
If you feel you’re interest rate is too high and you would like to lower it, you may achieve that through refinancing your student loans. Refinancing is the only way to lower your interest rate. Refinancing allows you to include one or more private and/or federal student loans into one new loan. Your new interest rate will be determined by current market rates and the creditworthiness of you or your cosigner. The stronger your credit history, the lower the interest rate you will be eligible for. Most young borrowers qualify for lower rates when they apply with a creditworthy cosigner.
This differs from how interest works when you consolidate your federal student loans with the Direct Consolidation Loan Program. The federal consolidation loan program is for federal student loans only. When you consolidate your student loans your new interest rate will be the weighted average interest rate for all of the loans you included in your consolidation.
Best Student Loan Refinance Lenders
SoFi Student Loans
- Rates as low as 1.74% variable and 2.49% fixed1
- No fees or prepayment penalties
- Unemployment protection
- Show more info »
1Fixed rates range from 2.49% APR to 6.94% APR with a 0.25% autopay discount. Variable rates from 1.74% APR to 6.59% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.
College Ave Student Loans
- Variable rate range: 2.94% – 4.79% APR1
- Fixed rate range: 2.99% – 4.89% APR1
- No application or prepayment fees
- Apply in 3 minutes or less for instant credit decision
- Show more info »
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
1The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account via Automated Clearing House (“ACH”). The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation.
2This informational repayment example uses typical loan terms for a refi borrower who selects the Full Principal & Interest Repayment Option with a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
3$5,000 is the minimum requirement to refinance. The maximum loan amount is $250,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.
Information advertised valid as of 12/21/2021. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.
Discover Private Consolidation Loan
- Consolidate federal and private student loans.
- No fees. No application, origination or late fees.
- Choice of fixed or variable interest rate.
- 0.25% interest rate reduction while enrolled in automatic payments1
- Show more info »
1Visit DiscoverStudentLoans.com/AutoDebitReward for terms and conditions.
2Lowest APRs are available for the most creditworthy applicants who are approved and choose a shorter repayment term, and include an Auto Debit Reward.
3The fixed interest rate is set at the time of application and does not change during the life of the loan unless you are no longer eligible for one or more discounts. The variable interest rate is calculated based on the 3-Month CME Term SOFR index plus the applicable margin percentage less any applicable discounts. The 3- Month CME Term SOFR index value for variable interest rate loans is 0.125% as of November 14, 2021. 3-Month CME Term SOFR is administered by CME Group and is published by CME Group on its website (cmegroup.com/termsofr). Discover Student Loans may adjust the variable interest rate quarterly on each January 1, April 1, July 1 and October 1 (each an “interest rate change date”), based on the 3-Month CME Term SOFR rate available for the day that is 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125), or 0%, whichever is greater. This may cause the monthly payments to increase, the number of payments to increase or both. If the 3-Month CME Term SOFR rate is less than zero percent, then the index will be deemed to be zero percent (as stated in the promissory note) for purposes of calculating your interest rate. Your variable interest rate (index + margin – applicable discounts) will not exceed 18%. Our lowest APRs are only available to applicants with the best credit. The APR will be determined after an application is submitted. It will be based on credit history, the selected repayment option and other factors, including a cosigner’s credit history (if applicable). If a student does not have an established credit history, the student may find it difficult to qualify for a private student loan on their own or receive the lowest advertised rate. Learn more about Discover Student Loans interest rates.
PenFed Student Loans Powered by Purefy
- Refinance federal and/or private student loans at lower rates with no fees.
- Choose a 5, 8, 12, or 15 year term to best fit your needs.
- Each applicant receives a personal loan advisor to help them through every step in the process.
- Spouses can refinance their loans together. Parents can refinance their loans too.
- Show more info »
1Rates and offers current as of April 1, 2021. Annual Percentage Rate (APR) is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed Rates range from 2.99% APR to 5.15% APR and Variable Rates range from 2.15% APR to 4.45% APR. Both Fixed and Variable Rates will vary based on application terms, level of degree and presence of a co-signer. These rates are subject to additional terms and conditions and rates are subject to change at any time without notice. For Variable Rate student loans, the rate will never exceed 9.00% for 5 year and 8 year loans and 10.00% for 12 and 15 years loans (the maximum allowable for this loan). Minimum variable rate will be 2.00%.
Compare Student Loan Rates
If you’re borrowing loans to pay for college, it is always a good idea to compare current interest rates in the federal student loan program against private student loans. This is particularly true when it comes to the PLUS Loan program. Whether you are a graduate/professional student, or a parent looking to borrow on behalf of your son or daughter, interest rates for a Direct PLUS Loan are typically higher than other loan types. And they come with an origination fee.
In comparison, private student loans can be highly competitive with lower rates and zero origination fees. Since both loans do require a credit check, if you are eligible for a loan with a lower rate and better terms, it may be worth taking the time to shop around.
How Student Loan Interest Rates Work
When it comes to federal student loans, the current interest rate is set by Congress and is based on the final 10-year Treasury notes auction held in May, with an added percentage.
When it comes to private student loans, historically most lenders have used the one-month or 3-month LIBOR (London Inter-Bank Offered Rate) as the basis for the interest rates they offer. Some lenders may use the Prime Rate, and you may also start to see the Secured Overnight Financing Rate (SOFR) used. Whichever index your interest rate is tied to, the lender will add a markup on top of it. The amount of the markup will be based on your credit and other factors. Ultimately, this will determine your Annual Percentage Rate (APR).
To get an idea of how student loan interest adds up on your student loans, we’ve got you covered. We go more in depth here.
Historical Student Loan Interest Rates
For a deeper history on student loan interest rates, we recommend checking out this great resource from the Federal Student Aid website. They track rates as far back as 2006. Understanding historical interest rates may be helpful if you have prior outstanding loans that you’ve lost track of, and you need to understand whether refinancing could save you some money today.
Student Loan Calculator
By using a student loan calculator (such as the one on this website), can give you an estimate of your monthly payment. Simply input the type of loan you have, the estimated loan balance, and your interest rate and loan term if you know them (estimate if you need to). And you’ll notice that we included helpful tips on the right-hand side, along with advanced options at the bottom to add more details or loans.
What to Read Next
Best Private Student Loans for January 2022
Private Student Loan Interest Rates
How Does Student Loan Interest Work
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