As of June 2025, the best interest rates on private student loans started around 3.19% for fixed-rate loans and between 4% and 5% for variable-rate loans. For federal student loans, rates in recent years have ranged from 2.75% to 6.54% for undergraduate borrowers. For the 2025-2026 school year, rates on undergraduate loans are set at 6.39%.

President Trump’s Big Beautiful Bill is massively rolling back federal student-loan programs in a nearly complete-180-degree turnaround from the Biden-era debt-forgiveness movement. The

Federal student loan rates dropped slightly for the 2025-26 school year, but are they the most affordable option?

The legislation will decrease the amount of money graduate students can receive for federal student loans, impose new limits on Pell Grant recipients, and increase taxes on schools with high endowment-to-student ratios.

If you’re looking to fill the gap left by the new caps on federal student loans, a private loan may make up the difference.

The Department of Education's announcement gives borrowers just weeks to consider their options before interest begins accumulating on their loans.