Federal student loan interest rate will increase July 1st

Published: Jun. 23, 2021 at 7:01 AM EDT|Updated: Jun. 23, 2021 at 9:23 AM EDT
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RICHMOND, Va. (WWBT) - The federal student loan interest rate will rise to 3.73 percent for the 2021-22 academic year. That’s after the historic low of 2.75% for the past year.

Now, although interest rates for student loans are increasing, rates are low compared with the last decade. A rate change doesn’t affect you if you’ve already locked in a loan.

Also, under the first COVID-19 relief bill, federal student loan interest rates are at 0% and are in forbearance until October 2021.

Still, if you are taking out college loans this year our partners at the financial website Nerdwallet say you should still pursue and exhaust federal loans before turning to private lenders.

Unlike private student loans, federal student loans don’t require co-signers and all borrowers receive the same interest rate.

One more tip! Experts say don’t turn to loans until after you’ve filled out the Free Application for Federal Student Aid (FAFSA) and until you’ve heard back from your college about scholarships, grants and other aid that doesn’t need to be repaid.

Copyright 2021 WWBT. All rights reserved.

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