Federal Student Loan Rates Rise to 6.52% for 2026-27 as Treasury Yields Climb
Updated
Updated · Newsweek · May 22
Federal Student Loan Rates Rise to 6.52% for 2026-27 as Treasury Yields Climb
2 articles · Updated · Newsweek · May 22
New federal student loans issued from July 1 will carry higher fixed rates: 6.52% for undergraduates, 8.07% for graduate borrowers and 9.07% for Parent PLUS loans.
The increase was triggered by the annual formula tied to the May 10-year Treasury auction, where higher yields—pressured by inflation and heavier government borrowing—pushed student loan rates up.
Only new borrowers are affected; existing federal loan holders keep their current rates, but students borrowing across multiple years face higher monthly payments and a larger total repayment bill.
More than 40 million Americans already hold student debt, and the higher rates arrive alongside tighter federal loan rules, including the end of Graduate PLUS for new borrowers and stricter borrowing limits for many graduate students.
Those changes could push students in costly programs toward private lenders, leaving them with fewer federal protections and potentially even higher variable rates.
With new federal loan caps, will private lenders become the new gatekeepers to higher education?
The new student loan law aims to control college costs. Will it work, or just create a new debt crisis?
As federal aid shrinks for graduate degrees, are we facing a future shortage of essential professionals?
2026 Federal Student Loan Shakeup: Interest Rate Hikes, OBBBA Reforms, and What Borrowers Need to Know
Overview
Starting July 1, 2026, federal student loans will see significant changes, including higher interest rates—most notably, Parent PLUS loans will rise to 9.07% with a 4.228% origination fee, making them one of the most expensive federal options. These new rates only apply to new loans, as existing federal student loan rates remain fixed. Families cannot borrow early to avoid these increases, since loans are tied to the academic year. These changes, driven by economic pressures and new legislation, mark a major shift in how students and parents will finance higher education in the coming years.