Student Loans Will Cost More

Beware that federal student loans will be more expensive this year because of rising interest rates.

(Image credit: This content is subject to copyright.)

Interest rates for federal student loans have inched up for the second time in as many years. The rate on undergraduate Stafford loans disbursed on July 1, 2018, or later is 5.05%, up from 4.45% last year. On Stafford loans for graduate and professional students, the rate is now 6.6%. And the rate on PLUS loans (which allow you to borrow up to the total cost of education, minus any financial aid) for graduates and parents is now 7.6%.

The higher rates won’t affect existing loans, but new borrowers will pay more interest over the life of the loan. For example, an undergraduate student who borrows $7,500 in new Stafford loans will pay about $2 more per month, or about $265 more over a standard 10-year repayment period.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

To continue reading this article
please register for free

This is different from signing in to your print subscription

Why am I seeing this? Find out more here

Kaitlin Pitsker
Associate Editor, Kiplinger's Personal Finance
Pitsker joined Kiplinger in the summer of 2012. Previously, she interned at the Post-Standard newspaper in Syracuse, N.Y., and with Chronogram magazine in Kingston, N.Y. She holds a BS in magazine journalism from Syracuse University's S.I. Newhouse School of Public Communications.