Federal student loan borrowers taking out new loans for the 2026-27 school year are paying more than last year. Loans first disbursed between July 1, 2026 and June 30, 2027 carry a 6.52% fixed rate for undergraduate Direct loans, 8.07% for graduate/professional unsubsidized loans, and 9.07% for Direct PLUS loans (parent and grad/professional) — confirmed directly from the Department of Education's Federal Student Aid office. That's up from 6.39% / 7.94% / 8.94% the year before.
What changed
| Loan type | 2025-26 rate | 2026-27 rate | Change |
|---|---|---|---|
| Direct Subsidized/Unsubsidized (undergrad) | 6.39% | 6.52% | +13 bps |
| Direct Unsubsidized (grad/professional) | 7.94% | 8.07% | +13 bps |
| Direct PLUS (parent/grad) | 8.94% | 9.07% | +13 bps |
Every loan type moved up by the same 13 basis points, because they're all set by the same formula.
Why the rate moved
Federal student loan rates aren't set by a committee vote — they're set by statute, using a fixed formula: the high yield of the last 10-year Treasury Note auction held before June 1, plus a statutory add-on that's different for each loan type.
For 2026-27, the relevant auction landed on May 12, 2026, producing a 4.468% high yield — up from 4.342% at the comparable 2025 auction. Add the statutory add-ons and you get this year's rates:
- Undergraduate: 4.468% + 2.05% add-on = 6.52% (rounded)
- Graduate/professional unsubsidized: 4.468% + 3.60% add-on = 8.07%
- PLUS (parent and grad/professional): 4.468% + 4.60% add-on = 9.07%
The add-on percentages are fixed in the Higher Education Act and don't change year to year — only the Treasury yield moves the final rate. That's why undergraduate, graduate, and PLUS rates all rose by the same 13 basis points this year: the underlying Treasury yield rose about 13 bps, and the add-on stayed put.
Who this affects
This rate applies only to new federal Direct Loans first disbursed on or after July 1, 2026 — not to loans you already have. If you borrowed under the 2025-26 window (6.39%/7.94%/8.94%) or any earlier year, that loan keeps its original fixed rate for the life of the loan. Federal loan rates are locked at disbursement, not adjusted annually like a variable-rate product.
Three groups feel this directly:
- Incoming and returning undergrads borrowing Direct Subsidized or Unsubsidized loans for the 2026-27 school year — 6.52% instead of last year's 6.39%.
- Graduate and professional students taking out new Direct Unsubsidized loans — 8.07%.
- Parents borrowing Direct PLUS loans, and graduate/professional students borrowing PLUS in their own name — 9.07%, the highest of the three tiers because it carries the largest statutory add-on (4.60%).
If you're not taking out a new loan this year, nothing changes for you — this is a rate for new borrowing, not a repricing notice.
What it means in practice
A 13-basis-point increase is small in isolation — on a $10,000 loan, roughly the difference between accruing about $652/year in interest versus $639/year at the undergraduate rate, before any repayment reduces principal. It doesn't change the borrowing decision on its own. What it does do is reinforce two things worth checking before you sign for a 2026-27 loan:
- Confirm you're borrowing the minimum you actually need. Federal loan limits still cap how much you can borrow in aggregate — $31,000 for a dependent undergraduate over four years, per the loan-limit figures in our federal vs. private student loan guide — borrowing less now means less interest at any rate.
- Take subsidized before unsubsidized, and federal before private, if you have the choice. Subsidized loans don't accrue interest while you're in school; unsubsidized and PLUS loans do. The rate increase doesn't change that ordering — it was already the right sequence, and it still is.
If you're weighing whether federal loans are worth taking at 6.52%+ versus a private loan, or how PLUS compares to shopping around for a private parent loan, see our federal vs. private student loan decision framework for the fuller comparison — that guide covers income-driven repayment, deferment, and forgiveness options that don't show up in the rate alone.
Bottom line
New federal Direct Loans for the 2026-27 school year cost 13 basis points more than last year across every loan type: 6.52% undergraduate, 8.07% graduate/professional, 9.07% PLUS. The move tracks a modest rise in the 10-year Treasury yield used to set the rate each May — the statutory add-ons themselves didn't change. If you already have federal loans, this doesn't touch your existing rate. If you're borrowing new money this fall, plan around these numbers, not last year's.
This content is for educational purposes only. ClearValue Lending is a financial-education and comparison platform, not a lender, broker, or financial advisor. Federal student loan rates are set annually by statute — verify current rates directly at Federal Student Aid before borrowing.
