For the 2016-2017 school year, the average interest rate for federal student loans was 4.45%. This is lower than the 2006-2007 school year, when it was 6.78%. In this article, we’ll find out why there has been an increase in student loan rates, and what you can do to keep them as low as possible!
Federal Student Loan Interest Rate
Student loans have been an increasingly popular source of financing for higher education, but now that the average interest rates for these loans are approaching the double digits, many students are wondering if it is worth it to borrow money.
In January 2018 the average interest rate of federal student loans was 6.817%. This is calculated by adding the weighted average of all federal student loan rates and includes undergraduate, graduate and PLUS loans that are in repayment during the month. This is down from 2017’s high of 7.9%, but higher than the recent low of 5.05% in September 2016.
How have student loan rates increased over the years?
Student loan interest rates have increased over the years. The average federal student loan interest rate is at 7.86% according to the Federal Reserve Bank of New York. In comparison, in 2007, the average interest rate was 6.89%. This means over a 10-year period, there has been an increase from 6.89% to 7.86%.
Student loan rates have increased over the years with no end in sight. The average federal student loan interest rate has gone from 6.8% in 2006 to 7.9% by 2016. This means that for every billion dollars of loans granted in 2006, borrowers would pay back a total of 5,662,721,000 dollars in interest fees by 2016. This is not only devastating for families trying to save money on their tuitions but also for students who are just beginning their careers.
What can students do to keep their interest rates low on loans?
One of the best ways to keep your interest rates low is by increasing your credit score. You should also be looking for a job that has lower than average federal student loan interest rates. If you are employed with a nonprofit, public, or state educational institution, then this option may be available. The National Consumer Law Center has a free online tool that lets students check if they qualify for one of these types of loans.
Student loans are among the best – if not the best – way to finance education. The average graduate with student loans has a debt of $26,600. With the interest rates on federal loans at 4.45%, students may be wondering what they can do to keep their interest rates low. There are several ways, but it takes a lot of effort and requires some planning!
The average federal student loan interest rate is 6.8%. This comes out to about $1,372 for every $100,000 in student loans.
The average federal student loan interest rate is 4.45%. If you only pay the minimum payment, you will end up paying a total of $5,750 per year in interest on your loans. This means that while the money you spend each month may be going towards your education, it isn’t living up to its full potential.