Student Loan Interest Rates to Increase in July

The U.S. Department of the Treasury is set to raise federal student loan interest rates in July, reported Money magazine. Rates will increase from 3.76 percent to 4.45 percent for undergraduates and from 5.31 percent to 6 percent for graduate students in the 2017-18 school year. Parent PLUS loans will have a rate of 7 percent, up from 6.31 percent.

This year's rates overall are the lowest since the government stopped issuing variable rate student loans.

In 2013, Congress approved legislation tying federal student loan interest rates to the 10-year Treasury note. The interest rate move, set at an auction Wednesday, was expected after the Federal Reserve raised benchmark short-term interest rates twice in the past six months in response to healthy U.S. economic growth, according to Money magazine.

The new interest rates, which go into effect July 1, apply only to borrowers who take out loans during the upcoming 2017-18 school year. However, those rates are fixed for the life of the loan.

 

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http://time.com/money/4774325/student-loan-interest-rate-increase-2017/