2025–2026 federal student loan rates: what they are and how they compare to Earnest | Earnest

Federal student loan rates are set for 2026—here’s how they compare to Earnest

By Kaydee Ambas, CFEI® | Published on March 30, 2026

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Every year, the U.S. Department of Education updates the interest rates on federal student loans based on the 10-year Treasury note auction. This year’s results are in—and for the 2025–2026 academic year, federal student loan interest rates are down slightly.

If you're planning to borrow for college or graduate school this fall, it’s more important than ever to compare your options. Below, we break down what the new federal rates are, how they’re calculated, and how they stack up against Earnest’s private student loan rates.

What are the new federal student loan interest rates?

For loans disbursed between July 1, 2025, and June 30, 2026, the new rates are:

Loan Type
Federal Rate (2025–2026)

Undergraduate (Subsidized & Unsubsidized)

6.39%

Graduate (Unsubsidized)

7.94%

PLUS Loans (Parents and Grad Students)

8.94%

These rates are fixed and apply for the life of the loan.

How federal student loan rates are calculated

Each year, federal student loan interest rates are set based on the high yield of the 10-year Treasury note auction that takes place in May. For 2025, the yield was 4.34%. From there, a fixed add-on is applied depending on the loan type:

How Earnest compares

Earnest offers both fixed and variable rate private student loans1, which can be a cost-effective option—especially for borrowers with strong credit or a qualified cosigner.

Here’s a side-by-side comparison:

Loan Type
Federal Rate (2025–2026)
Earnest Fixed Rate*
Earnest Variable Rate*

Undergraduate

6.39%

From 3.47% (with cosigner) or 5.17% (no cosigner)

From 4.99% (with cosigner) or 6.14% (no cosigner)

Graduate

7.94%

From 3.47% (with cosigner) or 4.27% (no cosigner)

From 4.99% (with cosigner) or 5.24% (no cosigner)

Parent/Grad (PLUS)

8.94%

From 3.47%

From 4.99%

*Rates current as of May 15, 2025. These are our lowest rates that are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account. Your actual rate depends on credit profile and other eligibility factors. For current rates, please visit www.earnest.com.

In addition to competitive rates, Earnest offers:

Should you choose federal or private student loans?

When trying to decide between federal and private loans, you should exhaust your federal student loan options first. Federal loans come with valuable borrower protections like:

**As a result of ongoing court actions, the terms of some Income-Driven Repayment (IDR) plans, including the SAVE plan, may be subject to change. Please refer to studentaid.gov for the current status of these plans.

That said, federal loans don’t always cover the full cost of attendance—especially for graduate students or families with limited financial aid eligibility. That’s where private student loans can help.

Private loans from lenders like Earnest can be a smart way to bridge the gap, especially if you or your cosigner has strong credit and is looking for:

Comparing all your options can help you borrow smarter—and save money over time.

Bottom line

With federal student loan interest rates on the rise, it’s worth taking the time to explore all your borrowing options. At Earnest, we’re committed to helping you make informed decisions that support your financial future.

Compare your loan options and see how much you could save.