Latest news with #federalstudentloans
Yahoo
15 hours ago
- Business
- Yahoo
Student loan rates & refinancing: What borrowers should know
Andrew Pentis, Bankrate consumer lending analyst and certified student loan counselor, joins Wealth with Yahoo Finance Senior Reporter Allie Canal to discuss student loan interest rates and to explain when borrowers might want to consider refinancing their loans. To watch more expert insights and analysis on the latest market action, check out more Wealth here. All week, we're giving you everything you need to know about paying back your student loans. Today it's all about interest rates and refinancing. An interest rate is basically the fee a lender charges for borrowing money. It is usually expressed as a percentage of the total principle amount owed. When refinancing, a borrower will swap their original loan for a new one, usually at a lower interest rate. Joining us now to discuss is Andrew Pentis, he's Bankrate consumer lending analyst and a certified student loan counselor. So Andrew, if you're just starting this process, what's the easiest way for borrowers to first check their current student loan interest rates? So they know the baseline of where they're starting. Yeah, it really depends on what your type of loan is. So if you have a federal student loan, the best way to check your current student loan interest rate is to log into your account at You can also talk to your federal student loan servicer, though that's easier said than done with long wait times and a diminished Department of Education. But in terms of your private student loans, yeah, check your statements. If you receive a paper bill in the mail, or contact your lender directly or log into their online portal if you can, but it should be fairly easy to collect those rates. So what would you consider a quote unquote good rate for a student loan right now, and what should borrowers aim for if they're shopping around or thinking about refinancing? Yeah, a good rate is lower than the rate you currently have and the lowest possible rate that you can qualify for. That's the short answer. Uh, but for context, federal student loan interest rates have been in the single digits for a long time. It was recently announced that rates for next school year will actually descend a bit. We're in a higher rate environment for those private student loan rates and refinancing rates, but still there are single digits single digit rates out there. So if you do have good credit or a creditworthy cosigner, you can lower your interest rate through refinancing, it can be really wise. When does it actually make sense to refinance and when should borrowers avoid it, especially if they do have some of those federal loans? The slam dunk situation for refinancing your student loans is if you already have a private student loan with a high interest rate. And that's because if you refinance it to a lower rate, you're not giving anything up. You might even switch to a better lender. But the more complicated situation is if you have federal student loans and you're considering refinancing those or lumping those into a refinance application with your private loans. And the reason it's complicated is that federal loans contain a lot of safety nets and protections, like access to income driven repayment plans that cap your dues at a percentage of your monthly income, as well as pathways to loan forgiveness. So refinancing those loans will strip those benefits away and turn the federal loans into a private loan permanently. So you really want to tread cautiously about refinancing those government exclusive loans. You mentioned better lenders. So if someone does decide to refinance, what types of lenders should they be considering? All types, there are credit unions, banks, online lenders and marketplaces like Bankrate as well as state guaranteed and state funded agencies that offer student loan refinancing. So just like with any other consumer financial product, it really helps to survey the landscape, check in with different types of lenders, and that way you hopefully get very various offers that you can compare and get the best deal possible for your situation. And given the current economic uncertainty, what are some guidelines that borrowers should keep in mind before refinancing or locking in that new rate? Yeah, the thing to harp on here really is that if you have that federal student loan and you're considering refinancing it, you know, as you mentioned, given these uncertain economic times, you really should should be hesitant to refinance those federal student loans, at least until the dust settles. And the reason for that again is that if you keep your federal student loan and something happens, you know, maybe you lose your employment or lose some of your income, you have access to some relief through that federal student loan. So whether it be a deferment or forbearance that pauses your monthly dues, or that income driven repayment plan that caps your monthly payment, those are really important protections to have when, you know, you might not be sure, for example, that you're holding onto your job. So definitely that's the best advice for now. We've been talking a lot about the Federal Reserve, how they could potentially lower interest rates sooner than expected. If you're considering refinancing now, can you refinance multiple times, or should you wait and try and slow play it? Absolutely. This is not a situation where you have to feel like you need to time the market, because if you can get a lower interest rate right now, say by refinancing a private student loan, it could save you lots of money and interest. And then yes, say that rates descend in 2026 or later and you want to refinance again, you can absolutely do that, assuming that your credit has maintained and you've built up a positive payment history on your existing refinance loan. Andrew, some smart tips for those borrowers. Thank you so much. Appreciate it. Thanks for having me. Sign in to access your portfolio
CBS News
3 days ago
- Business
- CBS News
What's a good student loan rate for fall 2025?
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. There are student loans with rates that won't break the bank — but you'll have to do your homework to find students heading into the fall 2025 semester have more than dorm room checklists and course schedules on their minds. They're also navigating today's tricky borrowing environment. While inflation has cooled substantially over the past year, interest rates remain high across the board, which can make it tough to find affordable borrowing options. And, the cost of higher education has continued to climb, which means that paying for school often requires taking out substantial amounts of money. So, borrowing for school is a significant financial decision right now. And, if you plan to borrow enough to cover all of your fall 2025 college expenses, you could end up with hefty interest charges if you aren't careful. That's why locking in a good student loan rate this fall is more important than ever. But what exactly is a "good" rate in 2025? With federal and private loan options on the table — and a wide range of rates — it's not always obvious. Below, we'll detail what you need to know to spot a solid rate and avoid overpaying for your education. Start comparing your private student loan options online now. What's a good student loan rate for fall 2025? Federal student loan rates declined slightly for the 2025-26 school year — the first time rates have fallen in five years. For federal undergraduate loans, student loans disbursed between July 1, 2025, and June 30, 2026, the interest rate will be 6.39% — down from 6.53% for the 2024-25 school year. Graduate student loans will have a 7.94% interest rate, and Parent PLUS loans will have an 8.94% interest rate. The general rule is that a good student loan rate is the lowest rate you can qualify for based on your financial situation, but is ideally below the national average. So, with fixed federal rates now at 6.39% for undergrads, anything significantly below that from a private lender could be considered competitive. And, it's possible to find substantially lower rates on private student loans right now. For example, there are lenders offering fixed private student loan rates starting at 3.29% and variable rates starting at 4.39% for the fall 2025 semester. Here's a breakdown of the current private student loan ranges from some of the top lenders: Private fixed-rate student loans : 3.29% – 17.99% : 3.29% – 17.99% Private variable-rate student loans: 4.39% – 15.99% For most borrowers, the lower end of those private student loan rate ranges is only accessible with a strong credit score and a low debt-to-income ratio, or with the help of a creditworthy co-signer. If you can land a fixed rate under 6%, that's good in today's environment. If your best offer is higher than 7%, though, and you qualify for federal aid, sticking with federal loans might be the safer route. After all, federal loans offer unique borrower protections like income-driven repayment plans and potential forgiveness options — and your rate will be lower on that type of loan, too. Find the student loans you need for the fall 2025 semester today. How to find the best student loan rates this fall If you're hunting for the lowest possible rate this fall, the key is to be prepared, know what the lowest rates are in today's rate landscape and then shop around and compare your options. Here's how to do that: Start with federal aid. Always fill out the Free Application for Federal Student Aid (FAFSA) first to find out what, if any, federal loans or grants you qualify for. Federal loans come with built-in benefits that private loans don't offer, like fixed rates, no credit checks for undergrads, deferment options and forgiveness programs Always fill out the Free Application for Federal Student Aid (FAFSA) first to find out what, if any, federal loans or grants you qualify for. Federal loans come with built-in benefits that private loans don't offer, like fixed rates, no credit checks for undergrads, deferment options and Compare private lenders. If you've maxed out your federal aid or are looking for additional funds, you'll need to turn to private lenders If you've maxed out your federal aid or are looking for additional funds, you'll need to Look for discounts. Some private lenders offer rate discounts if you sign up for autopay or if you're a returning customer. Even a 0.25% reduction can make a meaningful difference over time, so make sure to inquire about those opportunities to save. Some private lenders offer rate discounts if you sign up for autopay or if you're a returning customer. Even a 0.25% reduction can make a meaningful difference over time, so make sure to inquire about those opportunities to save. Apply with a co-signer if needed. Most undergrads don't have long credit histories, and that's where a co-signer (like a parent or guardian) can help. Co-signed loans often qualify for better rates, especially if the co-signer has strong credit. Most undergrads don't have long credit histories, and that's where a co-signer (like a parent or guardian) can help. Co-signed loans often qualify for better rates, especially if the co-signer has strong credit. Understand the fine print. The rate and loan terms also matter. For example, variable-rate loans may start lower but they can increase over time, which could become costly if rates rise further. Fixed-rate loans offer more predictability and are generally safer unless you're confident you'll repay quickly. So, if you're worried about increasing loan costs down the line, it could make sense to choose a fixed loan with a slightly higher rate rather than opting for a variable rate that could increase in time. The bottom line When it comes to covering the cost of college this fall, borrowers should be especially strategic about finding the best rate possible to keep the costs down. A good student loan rate in 2025 is anything under the federal benchmark — but is ideally closer to the 4% to 5% range, which may be possible to find with the right lender. But it's also important to remember that the "best" rate isn't just about the number. It's also about flexibility, protections and your long-term repayment goals.
