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2021 Student Loan Interest Rates: Federal, Private and Refinancing Loans

Student loan interest rates have a large impact on student loan repayment.

According to a 2017 report by nonprofit organization New America, “The average interest rate across all student loans is 5.8 percent before refinancing, and drops to 4.2 percent if all eligible borrowers refinance.”

We’ve compiled current rates for federal loans, private loans, and refinancing.

Federal student loan interest rates

Federal student loan interest rates are generally set mid-year for the following academic year. Federal student loan rates are set by Congress, not the Department of Education, and rates generally change every year.

These are fixed rates that will not change for the life of the loan. Here are the current interest rates for the 2021-2022 school year:

Federal student loanInterest rate
Undergraduate (direct subsidized loans and direct unsubsidized loans)5.50%
Graduate (direct unsubsidized loans)7.05%
Parents and graduate or professional students (direct PLUS loans)8.05%
Source: Federal Student Aid

The federal interest rates increased for the 2021-22 school year from the previous year. Federal interest rates have fluctuated in the past five years but are on an upward trend. Here are federal student loan interest rates for the past five years:

Academic yearUndergraduate loansGraduate loansPLUS loans
*3/2020 – 8/20230%0%0%
2021-2022*3.73%5.28%6.28%
2020-2021*2.75%4.30%5.30%
2019-20204.53%6.08%7.08%
2018-20195.05%6.60%7.60%
2017-20184.45%6.00%7.00%
2016-20173.76%5.31%6.31%
2015-20164.29%5.84%6.84%
2014-20154.66%6.21%7.21%
Source: Federal Student Aid

The federal student loan interest rates for the 2019-20 academic year have not been released yet. They typically are available in May after the Treasury note auction.

Private student loan interest rates

Private student loan interest rates vary greatly. Rates offered by private lenders depend on factors like:

  • Lender
  • Type of interest rate (fixed or variable)
  • Credit score, credit history and borrower’s income
  • Loan terms
  • Market trends

Private student loans are often utilized after a borrower exhausts all federal loan options. These loans are also a popular option used by students going into medical school, dental school, MBA programs and postgraduate studies. Here are interest rates for several of the private lenders we partner with:

Sallie Mae

Sallie Mae private student loans

  • Fixed interest rates starting at 4.50% APR
  • Variable interest rates starting at 6.37% APR

Earnest

earnest

  • Fixed interest rates starting at 4.42% APR
  • Variable interest rates starting at 5.62% APR

Ascent

Ascent Logo

  • Fixed interest rates starting at 4.13% APR
  • Variable interest rates starting at 6.17% APR

College Ave

college ave student loans

  • Fixed interest rates starting at 4.43% APR
  • Variable interest rates starting at 5.59% APR

How to choose a private loan lender

Sometimes you need to take out a private student loan to fill the gaps that federal aid won’t cover. How do you go about picking the right private loan lender for you? There are many factors to consider when picking a lender, including:

  • Interest rate
  • Type of interest rate (fixed or variable)
  • Lender reputation
  • Repayment options
  • Fees
  • Cosigner release
  • Deferment and forbearance options

There’s a lot to think about when it comes to private student loans. Most borrowers don’t have established credit and need a cosigner to be eligible for a private student loan. Private student loan interest rates can be fixed or variable.

Student loan refinancing interest rates

If you already have student loans, you can refinance your loans and potentially lower your interest rate. This could lead to huge savings in interest fees over the life of your student loan.

Keep in mind that if you refinance federal loans, you will lose access to federal protections like deferment, forbearance and federal loan forgiveness options. Here are interest rates for several private lenders that offer student loan refinancing:

SoFi

sofi
4.5 out of 5

SoFi: Best if you're unsure where to apply

  • Positives: Competitive rates, member benefits, and unemployment protection
  • Allows cosigners: Yes, but no cosigner release offered
  • Deferment or forbearance available: Yes, in limited situations
  • Interest rates: Fixed rates 5.24 – 9.99% APR; Variable rates 6.24 – 9.99% APR (rates include optional 0.25% AutoPay discount)
  • Bonus: $500 for refinancing 100k or more.

Splash Financial

splash logo
4.5 out of 5

Splash Financial: Best for easy application

  • Positives: Compares multiple lenders, good customer service available
  • Allows cosigners: No
  • Deferment or forbearance available: Yes, length varies based on lending partner
  • Interest rates: Fixed starting at 5.19% APR; Variable starting at 5.99% APR
  • Bonus: $300 for 50k to 99k or $1,000 when you refinance $100,000 or more

Earnest

earnest
4.5 out of 5

Earnest: Best for flexible repayment

  • Positives: Flexible repayment terms, custom loan payments
  • Allows cosigners: Yes
  • Deferment or forbearance available: Yes, up to 36 months
  • Interest rates: Fixed starting at 5.19% APR; Variable starting at 5.99% APR
  • Bonus: $200 for refinancing 50k to $99,999; $1000 for refinancing 100k or more.

Laurel Road

laurel road
5.0 out of 5

Laurel Road: Best for medical professionals

  • Positives: Flexible repayment terms, profession based discounts
  • Allows cosigners: Yes, cosigner release available after 36 months
  • Deferment or forbearance available: Yes, up to 12 months
  • Interest rates: Fixed starting at 5.44% APR; Variable starting at 5.49% APR
  • Student Loan Planner® bonus: $300 for refinancing 50k to 100k, $1,050 for refinancing over 100k, OR interest rate discount if applicable.

ELFI

elfi logo
4.5 out of 5

ELFI: Best for customer service

  • Positives: Highly competitive fixed rates
  • Allows cosigners: Yes, but no cosigner release
  • Deferment or forbearance available: Yes, up to 12 months
  • Interest rates: Fixed starting at 5.48% APR; Variable starting at 5.28% APR
  • Bonus: $300 for refinancing at least $50,000. $575 for 100k to 149k, and $1,275 for refinancing 150k+.

Credible

credible logo
4.5 out of 5

Credible: Best for comparing multiple lenders

  • Positives: Strong application experience
  • Allows cosigners: Yes
  • Deferment or forbearance available: Yes with some lenders
  • Interest rates: Fixed starting at 5.48% APR (with autopay)*; Variable starting at 5.28% APR (with autopay)*
  • Bonus: $1,250 bonus for loans over $100k, and $350 for loans $50k to $100k

How to choose a refinancing lender

Refinancing your student loans could be the way for you to get out from your student loan debt. This can be done by securing a lower interest rate and negotiating better student loan terms. Looking for a private lender for student loan refinancing is similar to looking for a personal loan lender. Factors to consider when choosing a student loan refinancing lender include:

  • Interest rate
  • Lender reputation
  • Repayment options
  • Fees
  • Cosigner release
  • Loan deferment and forbearance options

In the end, the right lender will depend on what’s most important to you. One of the main reasons to refinance is to secure a lower interest rate. This could potentially save you thousands of dollars in interest payments over the life of your loan.

How to choose between federal and private student loans

As mentioned before, private student loans are often used after a borrower exhausts any federal student aid. This is especially true when completing an undergraduate degree program.

Federal student loans are the best choice if you want to pursue student loan forgiveness. This could be through Public Service Loan Forgiveness (PSLF) or income-driven repayment forgiveness. Federal student loans also offer better loan deferment and forbearance options than private student loans.

If you’re planning to continue your education past undergraduate studies, you may need to take out private student loans to pay for school.

How to get the best private student loan and refinancing interest rates

If you do choose to apply for a private student loan, there are things you can do to secure a lower interest rate. This is also true if you are applying to refinance an existing loan. What are some ways you can lower your interest rate?

  1. Improve your credit score
  2. Find a cosigner with excellent credit
  3. Take advantage of interest rate discounts for setting up automatic monthly payments
  4. Pay your bills on time
  5. Try for shorter repayment terms

The best way to lower your student loan interest rate is to refinance. The lower your student loan interest rates are, the less your overall debt bill will be in the end.

You can also refinance your student loans more than once. You can work to improve your credit score and refinance again, securing even lower interest rates.

Refinance student loans, get a bonus in 2024

Lender Name Lender Offer Learn more
sofi
$500 Bonus
*Includes optional 0.25% Auto Pay discount. For 100k or more.
Fixed 5.24 - 9.99% APR*
Variable 6.24 - 9.99% APR*
splash logo
$1,000 Bonus
For 100k or more. $300 for 50k to $99,999
Fixed 5.19 - 10.24% APPR
Variable 5.99 - 10.24% APR
earnest
$1,000 Bonus
For 100k or more. $200 for 50k to $99,999
Fixed 5.19 - 9.74% APR
Variable 5.99 - 9.74% APR

Not sure what to do with your student loans?

Take our 11 question quiz to get a personalized recommendation for 2024 on whether you should pursue PSLF, Biden’s New IDR plan, or refinancing (including the one lender we think could give you the best rate).

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