Rates on Student Loans Will Go Up

You could refinance with a private student loan, but consider waiting until the pause on federal loan payments expires.

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The interest rate for federal direct Stafford loans for undergraduate students will increase to 3.73% on July 1, nearly a percentage point higher than the 2.75% rate for loans issued for the 2020–21 academic year, according to an analysis by Mark Kantrowitz, a student loan expert and author of How to Appeal for More College Financial Aid.

Interest rates on federal student loans are tied to the 10-year Treasury note, which has been inching higher. Rates on federal student loans are still much lower than they were a few years ago.

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Sandra Block
Senior Editor, Kiplinger's Personal Finance

Block joined Kiplinger in June 2012 from USA Today, where she was a reporter and personal finance columnist for more than 15 years. Prior to that, she worked for the Akron Beacon-Journal and Dow Jones Newswires. In 1993, she was a Knight-Bagehot fellow in economics and business journalism at the Columbia University Graduate School of Journalism. She has a BA in communications from Bethany College in Bethany, W.Va.