Who Do High Interest Rates Hurt? College Students

College students will pay more to borrow. Savers will continue to benefit but need to remain vigilant.

A college student walking across campus checking his phone and wearing a backpack.
(Image credit: Getty Images)

Signs that inflation is easing have reignited hopes that the Federal Reserve Board will reduce interest rates as early as this summer. But even if that happens, the rate cut will come too late for thousands of college students and their families.

The interest rate for federal undergraduate student loans disbursed between July 1, 2024, and June 30, 2025, will be 6.53%, the highest rate in 16 years. The rate for federal Parent PLUS loans, which parents can take out to cover the cost of a child’s college attendance, will jump to 9.08%, a 33-year high. 

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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.