2016-2017 Federal Student Loan Interest Rates

on May 11, 2016

Students taking out federal loans for the 2016-2017 school year now know what their interest rates will be.

For loans made July 1, 2016, through June 30, 2017, students can expect the following interest rates:

  • Undergraduate Stafford = 3.76 percent (1.17 percent + 2.05 percent)
  • Graduate Stafford = 5.31 percent (1.71 percent + 3.6 percent)
  • Grad PLUS and Parent PLUS = 6.31 (1.71 percent + 4.6 percent)

This is the lowest interest rate since 2013, when the interest rate on subsidized Federal Stafford loans for undergraduate students was 3.4 percent (6.8 percent on unsubsidized loans and loans to graduate students) and the interest rate on Federal PLUS loans was 7.9 percent. The lowest interest rate ever was 3.37 percent (repayment) and 2.77 percent (in-school) in 2004-2005, which borrowers could lock in by consolidating their loans (yielding 3.375 percent and 2.88 percent, respectively, as fixed interest rates).


Current interest rates for new loans through June 30, 2016, are 4.29 percent, 5.84 percent and 6.84 percent, respectively. So interest rates on new loans will be dropping by 0.53 percent (slightly more than half a percentage point), saving graduates more money in the long run.


Borrowers with existing federal loans cannot refinance them to get the new interest rates.

Starting October 1, 2016, the fees on federal education loans will increase.

  • Federal Stafford Loan = 1.069 percent (from 1.068 percent)
  • Federal PLUS Loan = 4.276 percent (from 4.272 percent)



When financial aid and federal student loans aren't enough to cover all college costs, consider financing the gap with private student loans. Shop around to find the loans that best fit your needs.

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