Federal student loan rates for 2026-27
Rates on new federal loans are fixed for the life of the loan and reset every July 1 for new loans, based on the 10-year Treasury auction in May plus a fixed margin. The May 12, 2026 auction yield was 4.468%.
| Loan, first disbursed July 1, 2026 to June 30, 2027 | Rate | Legal cap |
|---|---|---|
| Direct Subsidized and Unsubsidized, undergraduate | 6.52% | 8.25% |
| Direct Unsubsidized, graduate and professional | 8.07% | 9.50% |
| Direct PLUS (parents, and graduate students with older PLUS eligibility) | 9.07% | 10.50% |
Autopay discount: from July 1, 2026 the Department of Education cut the rate by a full percentage point, instead of the usual 0.25 point, for Direct Loans on automatic payments. Borrowers enrolled by December 31, 2026 keep it through June 30, 2028. After that the calculator assumes the usual 0.25-point discount.
The repayment plans after July 1, 2026
The 2025 reconciliation law (P.L. 119-21) rebuilt federal repayment. For loans made on or after July 1, 2026 there are two plans:
- Standard plan. Fixed payments over a term set by how much you owe: 10 years below $25,000, 15 years from $25,000, 20 years from $50,000 and 25 years from $100,000.
- Repayment Assistance Plan (RAP). Payments are a share of your adjusted gross income: 1% if you earn $10,001 to $20,000, rising one point for every extra $10,000, up to 10% above $100,000. The payment drops by $50 a month for each dependent and is never less than $10. Any unpaid monthly interest is not charged, and if your payment cuts the principal by less than $50, the government makes up the difference, up to $50. Whatever remains after 360 qualifying payments (30 years) is forgiven.
Borrowers with no loans made on or after July 1, 2026 keep access to the classic 10-year standard plan, Income-Based Repayment (IBR), and the graduated and extended plans, and can opt in to RAP. The SAVE plan was ended by court order, and PAYE and ICR close on July 1, 2028; borrowers still in them by then are moved to RAP unless they pick another plan. Check your options at studentaid.gov or with your servicer.
A worked example
Owing $35,000 at 6.52% on the classic 10-year plan costs $397.77 a month and $12,733 in interest. The new tiered standard plan stretches the same balance over 15 years: $305.27 a month, but $19,949 in interest. On RAP with an AGI of $55,000 and no dependents, the rate is 5%, so the first payment is $55,000 × 5% ÷ 12 = $229.17. That is more than the $190 of monthly interest, so the balance still shrinks, and the payment rises as your income does.
Paying it off faster
Extra payments go straight to principal once interest is covered, and they shorten every plan except when forgiveness is the goal. If you work for a government or a qualifying nonprofit, Public Service Loan Forgiveness cancels the rest after 120 qualifying payments, so paying extra makes little sense. Otherwise, pay extra on the highest-rate loans first. Refinancing with a private lender can lower the rate for strong credit profiles but ends access to income-based plans, forgiveness and deferment.