Breaking News: Student Loan Interest Rates Drop!

Written by Robyn Stewarton May 7th, 2025

For over a decade Ms. Stewart has counseled families on how to save, plan, and pay for higher education. Prior to joining College Coach, she was a financial aid officer at the College of the Holy Cross and an education advisor at two TRIO program locations. Ms. Stewart works with the Massachusetts Education Finance Authority (MEFA) to present paying for college workshops to hundreds of families across the state. She is a graduate of UMass Amherst and has a master in counseling from Northeastern University.

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In a welcome reprieve, today we have some good news for student loan borrowers. We now know what federal student loan interest rates will be for the 2025/26 school year, and… drum roll, please… those interest rates have dropped…slightly. For students and parents borrowing loans between July 1, 2025 and June 30, 2026, interest rates will be as follows:

Subsidized and Unsubsidized Direct Loans for undergraduate students: 6.392%
Unsubsidized Direct Loans for graduate students: 7.942%
Direct PLUS Loans for graduate students and parents of undergraduate students: 8.942%

This rate drop is likely a small silver lining to college students and parents who may be struggling with reduced income and devalued investments in this difficult time. While we advise families to minimize education borrowing by saving, utilizing payment plans, applying for financial aid, and considering colleges with low sticker prices or offering generous scholarships, more affordable student loan options are certainly a welcome option to add to families’ tuition payment arsenals.

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Read | Posted on April 1st, 2025

Written by Robyn Stewarton May 7th, 2025

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