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For U.S. borrowers, the best place to start is with federal student loans you qualify for, then borrow only what you need. For loans first disbursed from July 1, 2026, through June 30, 2027, federal fixed rates range from 6.52% to 9.07%, depending on loan type. Compare private loans only against actual offers—and do not choose by rate alone.
Which student loan is best for you?
There is no single best student loan for every borrower. Start by checking your federal aid eligibility and award, then compare the amount you still need with each loan’s rate, fees, borrowing limit, repayment terms, and protections. Federal Student Aid says federal rates and fees are generally lower than private student-loan rates and fees, but an individual private offer still needs to be compared on its own terms.
The rates below apply to U.S. federal Direct Loans first disbursed in the 2026–27 rate year—not to all student loans or to private lender offers. Federal Student Aid’s rate announcement, published June 4, 2026, says each loan’s rate is fixed for its life. Loans first disbursed in different years may have different rates.
Federal student loan options for 2026–27
| Loan type | Fixed rate for first disbursement July 1, 2026–June 30, 2027 | Who may qualify and borrowing limit |
|---|---|---|
| Direct Subsidized | 6.52% (Federal Student Aid, 2026 rate announcement) | Eligible undergraduates with financial need; check your award and current program terms for your eligibility and amount. |
| Direct Unsubsidized, undergraduate | 6.52% (Federal Student Aid, 2026 rate announcement) | Eligible undergraduate students; financial need is not required. Check your award and current program terms for your amount. |
| Direct Unsubsidized, graduate or professional | 8.07% (Federal Student Aid, 2026 rate announcement) | Eligible graduate and professional students; financial need is not required. Check your award and current program terms for your amount. |
| Direct PLUS | 9.07% (Federal Student Aid, 2026 rate announcement); 4.228% fee | Eligible parents of dependent undergraduates and eligible graduate or professional students. Maximum borrowing is the school’s cost of attendance minus other financial assistance. |
Subsidized loans: need-based eligibility and interest treatment
Direct Subsidized Loans are for eligible undergraduates with financial need. Their interest treatment differs from that of unsubsidized loans: the government pays interest during certain qualifying periods, including while the student is in school at least half-time and during the grace period. Check your award and current Federal Student Aid terms to confirm eligibility and how the rules apply to your loan.
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Unsubsidized loans: no need requirement, but interest accrues
Eligible undergraduates and graduate or professional students may qualify for Direct Unsubsidized Loans without demonstrating financial need. Unlike subsidized borrowing, interest accrues while the student is in school and during other periods when the loan is not being repaid. Paying interest while in school, if affordable, can limit the amount that accumulates.
Both Direct Subsidized and Direct Unsubsidized Loans generally have a six-month grace period before regular repayment begins. Confirm the terms that apply to your specific loan.
PLUS loans: higher rate, fee, and a distinct limit
Direct PLUS Loans are available to eligible parents of dependent undergraduate students and to eligible graduate or professional students. The 4.228% fee reduces the amount disbursed relative to the amount borrowed. PLUS borrowing is limited to the school’s cost of attendance minus other financial assistance. Eligible borrowers receive an in-school deferment and an additional six months after leaving school or dropping below half-time, according to Federal Student Aid’s Direct PLUS Loans guidance.
How to compare a private student loan
There is not enough established current lender pricing and terms here to rank private student-loan providers. A useful comparison requires actual offers for your borrower profile, school, and state. Ask each lender for the offer in writing and compare:
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- APR and rate type: Check whether the rate is fixed or variable and compare APRs for the same amount and repayment period.
- Fees and total cost: Include upfront fees and the repayment schedule, not just the advertised rate.
- Cosigner terms: If a cosigner is required or offered, check the obligations and whether the lender allows cosigner release, and under what conditions.
- Repayment options: Compare when payments begin, whether in-school payments are allowed or required, and the length of repayment.
- Hardship terms: Ask what happens if you cannot make payments, including any deferment or forbearance options and their conditions.
Federal Student Aid’s guidance that federal rates and fees are generally lower is a broad comparison, not a guarantee that every federal loan will beat every private offer. Consider a private loan only after reviewing the federal aid available to you and how the private loan’s terms fit your circumstances.
What the federal rate numbers mean
Federal Student Aid calculates these annual fixed rates using a 10-year Treasury note high yield of 4.468% in 2026, plus a loan-type add-on: 2.05 percentage points for undergraduate subsidized and unsubsidized Direct Loans, 3.60 points for graduate unsubsidized loans, and 4.60 points for PLUS loans. The Treasury yield and add-ons explain how the rate for this disbursement year was set; they do not make an individual loan’s rate variable. Once set for a loan, the rate remains fixed for that loan’s life.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Should you refinance federal student loans?
A private refinance can sometimes offer a lower rate, but moving federal debt into a private loan may change the terms and conditions. Before refinancing, compare potential interest savings with any federal repayment plans, temporary payment relief, or discharge provisions that may apply to your loans. Federal Student Aid’s repayment guidance is the place to check current federal options for your loan and circumstances; do not assume a private refinance preserves them.
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A practical order for choosing
- Review your school’s aid award and confirm which federal loans you are eligible to receive.
- Estimate the remaining amount you need after grants, scholarships, savings, and other available aid.
- Compare eligible federal options by loan type, rate year, fee, and applicable terms; do not borrow more than needed.
- If there is still a gap, compare private offers for the same amount and repayment period, including APR, fees, cosigner obligations, repayment options, and hardship terms.
- Before refinancing existing federal debt, compare the private offer’s savings with the federal terms or protections you could give up.
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