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The U.S. Department of Education announced Tuesday the interest rates on federal student loans for the 2024-2025 academic year.

The interest rate on federal direct undergraduate loans will be 6.53%. That’s the highest rate in at least a decade, according to higher education expert Mark Kantrowitz. The undergraduate rate for the 2023-2024 year is 5.5%.

For graduate students, loans will come with an 8.08% interest rate, compared with the current 7.05%. Plus loans for graduate students and parents will have a 9.08% interest rate, an increase from 8.05% now. Both of those rates haven’t been as high in more than 20 years, Kantrowitz said.

The rise in interest rates could complicate the Biden administration’s efforts to get the student loan crisis under control and relieve borrowers of the pain of interest accrual, experts say. Even as millions of people have benefited from recent debt relief measures, new students will be saddled with more expensive loans for decades to come.

  • UrsineApathy [any, comrade/them]@hexbear.netEnglish
    28·
    6 months ago

    and of course the loans at the subsidized rate are not enough to cover costs at an in-state school, so you also have to take out “unsubsidized” loans from the federal government, which are like double the interest rate of the subsidized loans.

    Thank you for saying this because people always conveniently forget this part. I went to a “budget” state school and subsidized loans only covered maybe half of any given semesters tuition and nothing else. If you needed to make rent, eat food or pay for the rest of tuition you needed to find money elsewhere. I worked full-time through school and still barely was able to to survive and had to take additional loans.