Student Loan Interest Rate and Limit Statistics

Student Loan Interest Rate and Limit Statistics

There are various types of federal student loans available to US citizens to help them afford the price of college. However, these loans are not interest-free and you may need to make use of multiple loans to cover the entire cost of attending college. 

Top student loan interest fee statistics

  • The student loan program cost the government $197 billion between 1997 and 2021
  • There was a $311 billion discrepancy between the amount that the government thought it would make and how much it actually made
  • The Department of Education forecast a profit of $114 billion
  • The $311 billion shortfall has been attributed to favorable repayment plans, student debt cancellation, and the repayment pause introduced due to the COVID-19 pandemic
  • The average student loan borrower will pay $26,000 in interest over the course of 20 years repaying their student loan
  • Of the total amount a student repays over the course of their loan, 67.1% will be interest payments.

Current interest rates and loan fees

Interest rates on student loans are fixed. This means that the interest rate does not change for the borrower from the time they take out the loan until the loan is paid off.

Borrowers also pay a loan fee. This will be taken from the total amount so borrowers will receive less than they are granted. However, they have to pay off the full amount that they are granted.

Loan Borrower Interest rateLoan fee
Direct Subsidized Loans and Direct Unsubsidized LoansUndergraduate4.99%1.057%
Direct Unsubsidized LoansGraduate or Professional6.54%1.057%
Direct PLUS LoansParents and Graduate or Professional Students7.54%4.228%

Please note: due to exceptional circumstances during the COVID-19 pandemic, student loan repayments were suspended at 0%. This is extremely unusual

Direct Subsidized Loans and Direct Unsubsidized Loans for undergraduates

  • Every year the federal student loan interest rates are set by Congress in May and this applies to the loans that are distributed for the first time between July of the same year and the following June.

[Graph 1]

Interest rates for Direct Subsidized Loans for undergraduates
First installment dateInterest rate
Jul ’06 – Jun ’086.80%
Jul ’08 – Jun ’096.00%
Jul ’09 – Jun ’105.60%
Jul ’10 – Jun ’114.50%
Jul ’11 – Jun ’133.40%
Jul ’13 – Jun ’143.86%
Jul ’14 – Jun ’154.66%
Jul ’15 – Jun ’164.29%
Jul ’16 – Jun ’173.76%
Jul ’17 – Jun ’184.45%
Jul ’18 – Jun ’195.05%
Jul ’19 – Jun ’204.53%
Jul ’20 – Jun ’212.75%
Jul ’21 – Jun ’223.73%

Direct Unsubsidized Loans for graduates or professionals

  • Graduate or professional students have a higher student loan interest rate than undergraduate students
  • They are also ineligible for subsidized student loans
First installment dateInterest Rate
July ’06 – June ’136.80%
July ’13 – June ’145.41%
July ’14 – June ’156.21%
July ’15 – June ’165.84%
July ’16 – June ’175.31%
July ’17 – June ’186.00%
July ’18 – June ’196.60%
July ’19 – June ’206.08%
July ’20 – June ’214.30%
July ’21 – June ’225.28%

Direct PLUS Loans for parents of undergraduates, graduates or professional students 

  • Parents of undergraduate students can take Direct PLUS loans to help cover the cost of their children’s education
First installment dateInterest Rate
Jul ’06 – Jun ’137.90%
Jul ’13 – Jun ’146.41%
Jul ’14 – Jun ’157.21%
Jul ’15 – Jun ’166.84%
Jul ’16 – Jun ’176.31%
Jul ’17 – Jun ’187.00%
Jul ’18 – Jun ’197.60%
Jul ’19 – Jun ’207.08%
Jul ’20 – Jun ’215.30%
Jul ’21 – Jun ’226.28%