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Average interest rates on most refinanced student loans are little changed from two weeks ago, according to Credible Student Loans. Rates on five-year graduate loans saw the biggest movement, increasing by 80 basis points.
College costs have gone up over the past year as the Federal Reserve has fought inflation by increasing the federal funds rate. Those higher rates make it more expensive for consumers to finance everything from college tuition to homes and cars.
Federal student loan rates for the 2023-24 school year have risen by the widest margin in about 20 years. While private student loan rates aren’t directly affected by federal rates, they’re likely to increase because they don’t have to stay as low to remain competitive with federal ones.
Important: Federal loans are almost always a better option than private loans. For instance, the Biden administration extended the repayment pause on federal student loans through the end of August 2023. You won’t qualify for this pause if you refinance your federal loans into private ones. You may also pay higher interest rates with private loans.
5-year variable student loan refinancing rates
Five-year undergraduate variable rates haven’t moved from last week. Graduate rates have risen from last week and are up 80 basis points.
Rates on both types of loans are up about 3% from 12 months ago.
UndergraduateGraduateThis past week6.71%5.59%2 weeks ago6.71%4.79%6 months ago4.02%3.51%1 year ago3.59%2.75%
10-year fixed student loan refinancing rates
Rates on 10-year fixed loans haven’t changed too much from two weeks ago. Undergraduate rates are up by 25 basis points, while graduate rates have dropped by six basis points.
From six months ago, undergraduate rates are up 84 basis points and graduate rates have increased by 82 basis points.
UndergraduateGraduateThis past week6.65%6.29%2 weeks ago6.40%6.35%6 months ago5.81%5.47%1 year ago4.01%3.66%
Student loan interest rates by credit score
Borrowers with better credit scores frequently get better rates, although that’s not always true. The table below shows the 10-year fixed student loan rates by credit score:
Below 680680-719720-779780+Average rateThis past week9.07%7.32%6.26%6.00%6.53%2 weeks ago7.81%7.09%6.31%6.13%6.38%
Example: Let’s say you’re repaying a $20,000 undergraduate loan over 10 years with the above interest rates. If your credit score is below 680, the lifetime cost of your loan would be $30,493 with this past week’s rate of 9.07%. For borrowers with a score over 780, paying an average rate of 6.00%, the same loan would have cost $26,645, or $3,848 less.
Frequently asked questions
Should I refinance my student loan?
There’s no specific answer to this question, as your decision is contingent upon on your unique financial situation. You might want to look at alternatives such as a less expensive school, scholarships, or a side job to earn more money. Whatever your decision is, make sure you understand the terms of your new loan before making a choice.
How do I get approved without a cosigner?
Getting approved without a cosigner usually includes factors outside of your credit score. Lenders may take into account GPA, major, projected future earning potential, and more when making approval decisions.
Can my private student loans be forgiven?
No, they won’t qualify for any federal forgiveness programs, including the widescale forgiveness currently being challenged in court.
Should I keep paying my student loan during the repayment pause?
You might be able to save hundreds or even thousands on interest if you repay your student loans during the repayment pause, set to go through August 2023. This is because any payment you make on your student loans goes directly toward your balance. When you make a payment traditionally, a portion of it goes toward paying down interest.