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Average interest rates on refinanced graduate student loans are up from two weeks ago, according to Credible Student Loans. Rates on undergraduate loans are down.
The average 10-year fixed student loan rate for borrowers with credit scores below 680 is 8.30%. This is higher than the average rate of 6.22% for borrowers across all credit scores. Usually, the lower your credit score, the higher the rate you’ll usually get.
As the below tables show, student loan borrowing costs have skyrocketed in the last 12 months. Federal student loan rates for 2022-23 are up by the most in almost two decades. These new rates don’t directly affect private student loan rates, but private rates may go up as they don’t have to stay as low to remain competitive with federal ones. Consumer borrowing costs across the board have risen sharply this year as the Federal Reserve aggressively moved to raise base rates to slow inflation.
Important: You are able to refinance your federal loan into a private loan, but private loans usually have higher interest rates. They also don’t have benefits like the repayment pause that’s set to expire at year-end. You also won’t qualify for federal student loan forgiveness. That makes federal loans the best choice in most cases.
5-year variable student loan refinancing rates
Rates on 5-year undergraduate loans have dropped more than 4 percentage points from last week, settling close to the level they were at six months ago. Graduate rates have gone up by 39 basis points.
Both undergraduate and graduate rates are up significantly from one year ago.
UndergraduateGraduateThis past week4.42%3.55%2 weeks ago8.79%3.16%6 months ago4.63%3.66%1 year ago2.59%2.40%
10-year fixed student loan refinancing rates
Rates on 10-year undergraduate loans fell slightly from last week. They’re more than 1% higher than they were six months ago, and about 2.7% higher than a year ago.
On the flip side, graduate rates have ticked up this past week.
UndergraduateGraduateThis past week6.31%5.97%2 weeks ago6.73%5.79%6 months ago5.21%4.55%1 year ago3.66%3.23%
Student loan interest rates by credit score
Your interest rate often improves with a higher credit score. Other aspects of your financial situation also have an impact on your rate. The table below shows the 10-year fixed student loan rates by credit score:
Below 680680-719720-779780+Average RateThis past week8.30%7.39%5.99%5.67%6.22%2 weeks ago7.35%6.99%6.09%5.72%6.43%
Example: Say you’re repaying $20,000 undergraduate loan over a 10 years with the interest rates listed below. If you are a borrower with a score below 680, the lifetime cost of your loan would be $29,500 with this past week’s rate of 8.30%. For borrowers with a score over 780, paying an average rate of 5.67%, the same loan would have cost $26,249, or $3,251 less.
Frequently asked questions
What’s the difference between federal and private student loans?
Federal student loans have a number of protections that private student loans don’t. The widespread forbearance and 0% interest rates during the coronavirus pandemic are some examples.
Similarly, income-based repayment plans are only available for federal student loans. They help to lower payments to a percentage of a person’s income. That’s a protection not available to private student loan borrowers that could make a big difference.
Can my private student loans be forgiven?
Unfortunately, no. Private student loans are not eligible for any federal forgiveness programs.
Is it hard to get approved for student loan refinancing?
Your credit history is the biggest factor in your approval chances. If you have a poor credit score, it will be harder for you to get a new loan. But you may be able to enlist a cosigner to boost your likelihood of approval.