The federal student loan interest rate will be 6.53% for undergraduate students, up from 5.5% for the current year.
Graduate students will see an 8.08% interest rate this coming academic year, up from 7.05%. And PLUS loans, which are available to both parents and graduate students, will come with a 9.08% interest rate, an increase from 8.05%. To be clear, the president does not set the federal student loan interest rates himself. The rates are set annually and are based on the 10-year Treasury note auction held every May. The increase isn't a total surprise since the Federal Reserve has kept the nation's benchmark interest rate at a 23-year high as it waits for inflation to cool.
Launched last year, the income-driven repayment plan can lower monthly bills for enrolled borrowers and reduce the amount they pay back over the lifetime of their loans.
Source: Education Headlines (educationheadlines.net)
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