The U.S. Department of Education has published its annual notices establishing fixed and variable interest rates for federal student loans made under the William D. Ford Federal Direct Loan Program.
The notices provide the interest rates applicable to Direct Loans for the period beginning July 1, 2026, including new fixed rate loans and certain older Direct Loans that remain subject to annually adjusted variable rates.
Fixed Interest Rates for 2026–27 Direct Loans
For Direct Loans first disbursed on or after July 1, 2026, and before July 1, 2027, the interest rates are:
- 6.52% for Direct Subsidized Loans and Direct Unsubsidized Loans made to undergraduate students
- 8.07% for Direct Unsubsidized Loans made to graduate and professional students
- 9.07% for Direct PLUS Loans made to parents of dependent undergraduate students and graduate or professional students
These rates are fixed for the life of the loan.
The rates are determined annually using the high yield of the 10 year Treasury note from the final auction held before June 1, plus a statutory add on percentage based on the type of loan. The May 12, 2026 Treasury auction produced a high yield of 4.468%, which was rounded to 4.47% for purposes of calculating the rates.
The 2026–27 rates represent a slight increase from 2025–26, when the rates were 6.39% for undergraduate Direct Subsidized and Unsubsidized Loans, 7.94% for graduate and professional Direct Unsubsidized Loans, and 8.94% for Direct PLUS Loans.
The Federal Register notice also includes historical interest rates for older fixed rate Direct Loans and information on how interest rates are determined for Direct Consolidation Loans.
Variable Interest Rates for Older Direct Loans
The Department also announced the annual variable interest rates effective July 1, 2026, through June 30, 2027, for certain older Direct Loans.
Variable rates generally apply to Direct Subsidized, Direct Unsubsidized, and Direct PLUS Loans first disbursed before July 1, 2006, as well as certain Direct Consolidation Loans for which the application was received before February 1, 1999. Unlike today’s fixed rate Direct Loans, the interest rates on these loans are recalculated annually.
For most of these loans, the 2026–27 variable rates are based on the May 26, 2026, 91 day Treasury bill rate of 3.68%, plus the applicable statutory add on. Depending on the loan type, disbursement date, and loan status, the applicable rates include:
- 5.38% for certain Direct Subsidized and Direct Unsubsidized Loans while the borrower is in school, grace, or deferment
- 5.98% for certain Direct Subsidized and Direct Unsubsidized Loans while in other statuses
- 6.18% for certain loans first disbursed between July 1, 1995, and June 30, 1998, while the borrower is in school, grace, or deferment
- 6.78% for certain loans first disbursed between July 1, 1995, and June 30, 1998, while in other statuses, as well as certain other older Direct Loans
- 5.98% for certain Direct Consolidation Loans associated with applications received between October 1, 1998, and January 31, 1999
- 7.09% for certain Direct PLUS and PLUS Consolidation Loans first disbursed before July 1, 1998
For certain older Direct PLUS and PLUS Consolidation Loans first disbursed before July 1, 1998, the variable rate calculation uses the weekly average one year constant maturity Treasury yield rather than the 91 day Treasury bill. For 2026–27, that Treasury yield was 3.99%, resulting in the 7.09% rate.
Because the applicable variable interest rate depends on the loan type, when the loan was disbursed, and in some cases the loan’s current status, institutions and borrowers should consult the Department’s complete tables to determine the applicable rate for a particular loan.
Additional Information
The complete Federal Register notices provide additional details, including historical fixed interest rates, applicable statutory interest rate caps, Direct Consolidation Loan information, and the complete variable interest rate tables.
Fixed Rate Direct Loans:
Federal Register: Annual Notice of Interest Rates for Fixed Rate Federal Student Loans
Variable Rate Direct Loans:
Federal Register: Annual Notice of Interest Rates for Variable Rate Federal Student Loans