The 2026-27 federal student loan interest rates are now confirmed based on the May 12 Treasury note auction. Undergraduate direct loans will carry a 6.52% rate (up from 6.39%), graduate loans will be 8.07% (up from 7.94%), and Parent PLUS loans will be 9.07% (up from 8.94%). All new loans issued on or after July 1, 2026 will carry these rates. Loans you already have are not affected — federal student loan rates are fixed at origination.
Every year in May, the U.S. Treasury auctions 10-year notes — and whatever yield investors accept becomes the foundation for federal student loan rates through the following June. The math is set by law: undergraduate direct loans are priced at the Treasury yield plus 2.05 percentage points, and Parent PLUS loans add 4.60 points on top.
The May 12, 2026 Treasury auction produced a high yield of 4.468%.1 That number is now locked into the formula.
The 2026-27 Rates, Side by Side
| Loan Type | 2025-26 Rate | 2026-27 Rate | Change |
|---|---|---|---|
| Undergraduate Direct (subsidized + unsubsidized) | 6.39% | 6.52% | +0.13 pp |
| Graduate Direct (unsubsidized) | 7.94% | 8.07% | +0.13 pp |
| Parent PLUS | 8.94% | 9.07% | +0.13 pp |
These rates apply to any federal loan first disbursed between July 1, 2026 and June 30, 2027. If you borrowed last year, your existing loan keeps its original rate — nothing about this affects prior borrowing.1
What the Rate Increase Actually Costs
A 0.13 percentage point increase sounds minor. In absolute terms, it's not large — but over a 10-year repayment it adds up in ways that are worth naming before you sign a Master Promissory Note.
At 6.52%, every $10,000 borrowed produces a monthly payment of $113.64 on the Standard 10-Year Repayment Plan, with a total repayment of $13,637 over the decade.1 At the 6.39% rate from 2025-26, the same $10,000 generated $113.03 per month and $13,560 total. The difference per $10,000 borrowed: about $77 over 10 years.
For a typical borrower taking $27,000 in undergraduate loans (the federal annual maximum for dependent students over four years), that's roughly $208 in additional interest at the new rate. Not catastrophic — but real money, and it scales with debt load.
Parent PLUS borrowers face a larger baseline burden. At 9.07%, a family borrowing $30,000 over two years would repay roughly $45,600 over 10 years, compared to $45,250 at the old rate.
Parent PLUS loan limits are also changing this year under the One Big Beautiful Budget Act. Starting July 1, 2026, Parent PLUS loans for a dependent undergraduate are capped at $20,000 per year and $65,000 aggregate — down significantly from prior limits. Families who planned to borrow more than that will need to find other funding sources. Our guide to parent college payment options covers what's available when federal loans fall short.
Why Rates Are Still Elevated
Federal student loan rates are tied to Treasury yields, which remain high by historical standards. The 10-year Treasury yield sat near 4.5% in May 2026 — far above the 1.5% to 2% range that prevailed from 2010 to 2021.
For context: undergraduate rates were 3.73% for the 2021-22 school year. The jump to the current 6.52% reflects Treasury market conditions since the Federal Reserve began raising rates in 2022, not a change in federal loan policy. Until Treasury yields fall substantially, student loan rates will remain in the 6% to 7% range for undergraduates.
This is why understanding the difference between federal and private student loans matters more now. Some private lenders have been advertising rates below 6% for creditworthy borrowers with a cosigner — but federal loans come with income-driven repayment options, deferment, and forgiveness pathways that private loans don't offer. The rate isn't the only number to compare.
What to Do Before July 1
If you're enrolling in fall 2026 and have already accepted your financial aid offer, your new loans will be disbursed at the 2026-27 rates. There's no mechanism to lock in the 2025-26 rate — loans aren't disbursed until the semester begins.
What you can do:
Borrow only what you need. The federal undergraduate annual limits range from $5,500 to $7,500 per year for dependent students, with higher caps for independent students. You're not required to accept the full amount on your award letter — and reducing principal is the most direct way to reduce total interest paid.
Understand your total debt picture. Our guide on how much student debt is too much uses the standard rule of thumb: total undergraduate borrowing should not exceed your expected first-year salary. At 6.52% interest over 10 years, crossing that line makes repayment painful.
Compare net price before attributing debt to a school. The average student loan debt at graduation varies enormously by school type. Students who borrow $15,000 from a state school and $60,000 from a private university face very different repayment math at 6.52% — even if the sticker prices looked comparable on paper.
If you're looking at prior reporting on how the rate formula works and what borrowers expected before the May 12 auction, see our earlier student loan rates 2026 explainer. If you're also navigating changes to income-driven repayment and PSLF, the PSLF buyback cost increase matters for anyone in public service employment.
The rate increase is small. The broader context — higher base rates, new loan caps, fewer repayment options under OBBBA — is what makes the 2026-27 loan environment meaningfully different from four years ago.
Footnotes
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CNBC. (2026, May 12). Student loan interest rates are set to rise for 2026-27: Expert analysis. https://www.cnbc.com/2026/05/12/student-loan-interest-rates.html ↩ ↩2 ↩3
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The College Investor. (2026, May). Federal student loan rates set to rise for the 2026-27 school year. https://thecollegeinvestor.com/80477/federal-student-loan-rates-set-to-rise-for-the-2026-27-school-year/ ↩
