Federal Student Loan Interest Rates Rise to Highest in a Decade

The cost of borrowing money from the federal government to pay for college is set to jump to the highest level in at least a decade. The interest rates on new federal student loans will increase by about half a percentage point from their current levels starting July 1 following the Treasury Department’s auction on Wednesday of 10-year notes, the government bond to which the rates are tied. The rates are recalculated each year. For new undergraduate student loans, the interest rate will increase from 4.99 percent to 5.5 percent. That’s the highest level that most undergraduate borrowers have faced since 2013.