Federal Student Loan Rates to Increase, Impacting Borrowing Costs for Families
Federal student loan rates are set to rise for the 2026-27 academic year, driven by elevated inflation and higher Treasury yields. The rates are determined by the Treasury's May auction of 10-year notes, which recently yielded 4.47%, up from 4.34% in 2025. This increase affects the fixed rates on federal student loans, with undergraduate loans rising to 6.52%, graduate loans to 8.07%, and Parent PLUS loans to 9.07%. Despite the increase, experts like Stacey MacPhetres from Bright Horizons suggest that federal loans remain a favorable option for undergraduates due to their fixed rates and federal protections. However, for graduate and Parent PLUS loans, borrowers are advised to explore private loan options, which may offer competitive rates.