Best Student Loan Rates of May 2024
Updated April 25, 2024 at 12:47 pm
Getting the lowest possible interest rates on student loans can save you money when borrowing funds for your education. Finding the best student loan rates can be tricky, though, and will depend not only on the type of loan you need but also factors like your credit score and whether you use a co-signer.
Here’s a look at some of the best student loan interest rates available today and what to expect when shopping for your own school funds.
Our Methodology Newsweek Vault’s loan experts evaluated multiple data points to help our readers make sense of their borrowing options across student loans and personal loans. To narrow down the best available offers, we weigh the product pros and cons across five core categories, including:
- Application process
- Eligibility requirements
- Interest rates
- Loan amounts (minimum and maximum)
- Repayment flexibility
Our Picks - Best for Unique Loan Options: Ascent
- Best for Rate Matching: Earnest
- Best for No Fees: SoFi
- Best for International Students: MPOWER Financing
- Best for Part-Time Students: College Ave
- Best for No Co-signer: Funding U
- Best Platform for Searching Low Rates: LendKey
- Best for Fast Co-Signer Release: Sallie Mae
- Best for Multi-Year Approval: Citizens Bank
- Best for Nursing Students: RISLA
- Best for Students With a Co-Signer: Education Loan Finance
Compare Student Loan Rates Now
11 Best Student Loan Rates of 2024
Best for Unique Loan Options
Ascent
on Credible’s website
Why We Chose It
Ascent has student loans for undergraduate, graduate, and even international and DACA students. On top of co-signed loans, Ascent also offers non-cosigned loans for eligible students even if they don’t have established credit. Read our Ascent student loans review.
Pros
- Competitive variable interest rates
- Borrow up to 100% of your educational expenses
- Co-signer release available after just 12 months
Cons
- Outcomes-based loans only offered to juniors and seniors with at least a 3.0 GPA
- Lowest variable APR is reserved for co-signed loans
- Non-cosigned loans have capped loan amounts
Best for Rate Matching
Earnest Student Loan
Vault Verified
Why We Chose It
While Earnest offers its own low interest rates, the company also has a rate match guarantee; if you find a lower rate elsewhere on the same loan terms, Earnest will match it and give you a $100 Amazon gift card for the trouble. That way, you’re guaranteed to come out ahead, no matter what. Read our Earnest student loans review.
Pros
- Rate match guarantee plus bonus if you find a better rate elsewhere
- Option to skip one payment per year
- Nine-month grace period after graduation
Cons
- Application decision can take up to three business days
- Not available in all states
- No co-signer release offered
Best for No Fees
SoFi Student Loan
Vault Verified
Why We Chose It
SoFi has some of the lowest variable and fixed interest rates on school loans, along with an easy online approval process and the ability to borrow your full educational costs. Other unique perks include no fees, career services and the ability to earn and redeem points to help pay down student loans. Read our SoFi student loans review.
Pros
- Competitive variable and fixed interest rates
- No origination, late or insufficient funds fees
- Apply online and get your rate quote in three minutes or less
Cons
- Co-signer release not available until 24 months of on-time payments in most states
- Grace period after graduation is only six months
- Only four repayment term options to choose from
Best for International Students
MPOWER Financing
Vault Verified
Why We Chose It
When you’re not a U.S. citizen, finding the funding you need can be tricky. MPOWER Financing provides loans to qualified foreign students planning to attend school in the U.S. or Canada with up to $100,000 in fixed-rate borrowing.
Pros
- Available to international students, DACA recipients, asylum seekers, and refugees
- No co-signer or collateral required
- Check your eligibility in 30 seconds
Cons
- Only offered if attending certain U.S.- or Canada-based schools
- Maximum lifetime borrowing limit is $100,000
- Limited eligibility
Best for Part-Time Students
College Ave Student Loans
on Credible’s website
Why We Chose It
With some of the lowest fixed interest rates and an autopay discount, College Ave can help save creditworthy borrowers a lot of money on their educational loans. And unlike many lenders, College Ave welcomes students who attend college less than half time. Read our College Ave student loans review for more information.
Pros
- Several types of fixed-rate loans, including undergraduate, graduate, and parent
- Borrow up to 100% of your educational expenses
- Multiple in-school and after-graduation repayment options
Cons
- The majority of College Ave borrowers will require a co-signer
- Grace period only lasts six months after graduation for undergraduate students
- Cosigner release is only available after half of the eligible payments have been made
Best for No Co-Signer
Funding U Student Loans
Vault Verified
Why We Chose It
Funding U exclusively offers loans to student borrowers without the need for a creditworthy co-signer. Loans are available to all class years and are based on factors like academic achievements and your intended career path.
Pros
- Never requires a co-signer for student borrowing
- Loans are available to all class years
- Interest rates are fixed and competitive
Cons
- Underclassmen may still find it difficult to get approved
- Not available in all states
- Limited loan maximums
Best Platform for Searching Low Rates
LendKey Student Loans
on Credible’s website
Why We Chose It
Rather than searching for the best student loan rates from lenders one at a time, platforms like LendKey make it easy to get ultra-competitive loan offers from multiple lenders with a single search. You can compare different loan terms, interest rates, and fees before choosing the one that suits your needs best.
Pros
- Low interest rates and loan options from multiple lenders
- Borrow up to 100% of your educational costs
- Excellent consumer reviews
Cons
- Some lenders are credit unions and require membership to finalize loan
- Not available in all states
Best for Fast Co-Signer Release
Sallie Mae
Vault Verified
Why We Chose It
Sallie Mae offers one of the fastest co-signer release time frames—just 12 months. You could qualify for a student loan with Sallie Mae even if you attend school less than half-time. If approved, you can borrow up to your school’s cost of attendance. Read our Sallie Mae student loans review.
Pros
- Co-signer release is available after 12 months of on-time payments
- Can qualify even if you’re enrolled less than half-time
- Broad range of loan amounts
Cons
- Only two repayment terms for most loans
- Refinance student loans aren’t available
- No prequalification application
Best for Multi-Year Approval
Citizens Bank
on Credible’s website
Why We Chose It
Citizens Bank has funded educational loans for over 40 years. It offers graduate, refinance, undergraduate and parent loans with no origination fees. If approved, you might gain access to multi-year approval, which means you can get approved for additional educational funding without agreeing to a hard credit check that lowers your credit score. For more information, read our Citizens Bank student loans review.
Pros
- Potential multi-year approval
- Option to prequalify
- Interest-only payment option while in school
Cons
- Most loans have only three repayment terms
- Maximum loan limits
Best for Nursing Students
RISLA
Vault Verified
Why We Chose It
RISLA has one of the lowest APR ranges on our list. While students pursuing all types of degrees might qualify, this option provides a special perk for nursing students. If you work as a nurse in Rhode Island after you graduate, you could qualify for a four-year, interest-free period on your student loans.
Pros
- Fast application process
- Low APR range compared to some other lenders
- Option to prequalify
Cons
- Cumulative loan limits
- Must earn at least $40,000 per year
Best for Students with a Co-Signer
ELFI
Vault Verified
Why We Chose It
ELFI offers student loans from $1,000 with competitive starting variable- and fixed-rates. You can make interest-only payments while in school to lower your total borrowing costs. However, you’ll need to apply with a co-signer if you have minimal credit history and income. The lender’s minimum credit score requirement is 680, and you need an annual income of at least $35,000 to qualify. Read our Education Loan Finance student loans review.
Pros
- Borrow up to your school’s cost of attendance
- Possible economic hardship forbearance of up to 12 months
- No origination fees
Cons
- Late fees
- Maximum rate not disclosed
- You or a cosigner must earn at least $35,000 a year
What Are Current Student Loan Interest Rates?
While private lenders can set interest rates based on benchmark fluctuations, the borrower’s credit history and even the repayment terms you choose, interest rates on federal student loans are the same for everyone. These rates may be updated annually and vary depending on the type of loan you require and where you are in your educational journey.
| Loan Type | Fixed APR |
| Direct Subsidized and Unsubsidized Loans (undergraduate borrowers) | 5.50% |
| Direct Unsubsidized Loans (graduate and professional borrowers) | 7.05% |
| Direct PLUS Loans (parents and graduate and professional borrowers) | 8.05% |
Types of Student Loans
Paying for a college education usually requires some combination of savings, grants, scholarships, earned income while in school, and student loans. There are a few different types of student loans to consider depending on your situation, how much you need to borrow, and your current income.
- Federal undergraduate loans: Some undergraduate loans are offered directly from the Department of Education (ED). These federal loans—which may be subsidized or unsubsidized—each have standard fees, interest rates, repayment terms, and protections for borrowers. They may be needs-based or—in the case of a Parent PLUS loan—require a parent to qualify based on credit history. In order to take out a federal student loan, you’ll need to fill out a Free Application for Federal Student Aid (FAFSA) by that school year’s deadline.
- Federal graduate loans: Federal loans for graduate students are similar to federal undergraduate loans, except that student borrowers are expected to have no adverse credit history on their credit reports if applying for a Grad PLUS. Parents can also take out a Parent PLUS loan if they want to fund your graduate education. They have higher borrowing limits, but the same standard rates, repayment terms, and protections as undergraduate federal loans.
- Private undergraduate loans: Offered by private financial institutions and lenders, private undergraduate loans give students access to the additional funds they may need for undergraduate studies. Because these loans aren’t federally backed, borrowers will typically need a creditworthy co-signer. These loans don’t offer the same protections and benefits as federal loans (like loan forgiveness or income-based repayment plans) but do allow for more personalized terms.
- Private graduate loans: These loans are provided by private lenders and are designed for students enrolled in a masters or professional degree program. Since graduate borrowers are more likely to have a credit history and income, these loans may be easier to obtain without a cosigner.
- Student loan refinancing: Borrowers can refinance their existing student loans after graduation, combining multiple balances into one loan and streamlining the repayment process. Refinance loans also allow student borrowers to potentially reduce their interest rates, adjust repayment terms, and even remove a cosigner.
Federal Student Loans vs. Private Student Loans
Many students will utilize a combination of federal student loans and private student loans in order to fully fund their educational needs. While both types of loans can be beneficial—and even necessary—it’s important to understand the differences between the two.
Federal loans are those offered by the U.S. Department of Education (ED), and are only available to students who fill out a FAFSA by each year’s deadline. These loans are federally-backed with certain protections and fixed fees as well as interest rates. Some federal student loans are only offered to students with financial need, while others are credit-based and don’t require you to demonstrate need.
Private student loans, on the other hand, are available to student and parent borrowers who are able to meet each individual lender’s requirements. These loans are typically available for up to 100% of your educational expenses, though the interest rates and repayment terms may vary from one lender to the next. Private student loans can be outcomes-based but are typically offered to those to meet the lenders’ credit requirements, so co-signers are frequently needed.
| Federal Student Loans | Private Student Loans | |
| Interest Rates | 5.50% to 8.05% fixed | 4.39% to 15.66% fixed, 5.73% to 16.70% variable |
| Fees | 1.057% to 4.228% loan origination fee | Varies by lender and loan |
| Qualification Requirements | Borrowers must be enrolled at least half-time in an eligible institution; financial need may be required, depending on the loan type | Varied by lender and loan type but is often heavily credit-based |
| Borrowing Limits | Up to $57,500 for undergraduates, up to 100% of the total cost of attendance for graduate students | Up to 100% of your educational costs |
| What We Like | Income-driven repayment plans, loan forgiveness programs, federal protections, not always credit-based | Flexibility, higher borrowing limits for undergraduates, low or no fees |
| What We Don’t Like | Loan limits for undergraduates, higher interest rates for some borrowers, loan fees | May be more difficult for borrowers to qualify, rates can be higher, no federal protections or benefits |
How Does Student Loan Interest Work?
The interest on a student loan begins accumulating as soon as that loan is disbursed to your school. If you have a subsidized federal loan, the government will cover the interest payments on that debt until you graduate. If you have a federal or private unsubsidized loan, the interest accrued will simply add to your loan balance until you graduate.
Once you graduate and begin repaying your loan, the balance will continue compounding according to your agreed and fixed interest rate or the current variable rate, depending on your loan agreement. This means that the amount you owe will continue changing as payments are made and new interest is calculated.
Many private lenders give you the option to pay toward your loan while you’re still in school. These payments may be a set dollar amount (such as $25 monthly), a portion of your principal and interest, or just cover the interest as it accrues. Paying toward your loans before graduation, when possible, can help you reduce your total amount owed in the end.
Calculating Student Loan Interest
- Determine your daily interest rate: Also interest rate factor (IRF), this number represents how much interest is applied to your account on a daily basis. To calculate this number, simply divide your annual percentage rate (APR) by 365. So, if your loan has a fixed rate of 7.25%, your daily interest rate would be 0.0199% (0.0725 / 365 = 0.000199 or 0.0199%)
- Figure out how much you’re paying in daily interest: Once you have your daily interest rate, you can calculate how much that equates to in daily interest charges. You’ll need to multiply that IRF by your current balance. So if your new loan is disbursed today for $20,000, you’ll pay $3.98 in daily interest (0.0199% x 20,000 = $3.98)
- Confirm how often your interest is compounded: While you’ll pay interest on your loan balance daily, it won’t always be compounded (or calculated) on a daily basis. Interest may be applied daily but compounded monthly or annually, or it could be compounded daily. Depending on which calculation your loan uses, your total interest charges can vary.
- Calculate your monthly interest: If your loan interest is calculated daily but compounded monthly, it means that you’ll pay the same amount in interest for each day of the month. So in the example above, you’ll pay $3.98 in daily interest for the entire first month; if the month has 30 days, that’s $119.40 in monthly interest.
How To Qualify for a Lower Student Loan Interest Rate
Federal loans come with fixed rates, so there’s nothing you can do to qualify for a lower rate.
However, when you apply for a private student loan, lenders generally base your rate on factors like your credit score and income. Here’s what steps you can take to better your chances of securing a lower rate.
- Improve your credit score. Before applying, take steps to raise your score, like paying down credit card debt or reviewing your credit reports for inaccuracies and disputing them.
- Comparison shop. Compare rates from at least three to five student loan companies. Some will allow you to prequalify online to preview rates you could receive.
- Add a co-signer. If you know someone with a higher credit score and stable income, ask them to cosign the loan. Just let them know that if you default, it could affect your credit and theirs. Plus, explain to them that cosigning could increase their debt-to-income ratio and make it harder to qualify for future loans.
Frequently Asked Questions
How Do I Get the Lowest Interest Rate on a Student Loan?
Getting the lowest interest rate on student loans is a combination of how well you (and your co-signer, if applicable) qualify, the amount and type of loan you take out, and how you plan to repay the debt. Co-signed loans generally qualify for lower rates than non-consigned or even outcomes-based loans, for example. And shorter repayment terms may qualify you for better rates than longer loan terms.
Can I Get a Lower Student Loan Interest Rate by Refinancing?
Once you enter the repayment phase of your loans (usually after graduating), you may have the option to refinance your student loan debt. Depending on your credit history, income, and other personal factors, refinancing may enable you to reduce your overall interest rate, consolidate and simplify your loan repayment, or both.
Do Federal Student Loan Interest Rates Change Each Year?
Federal student loan interest rates are set by Congress on an annual basis, with new rates published each spring. These rates are calculated by using 10-year Treasury note auction yield as a benchmark.
Can My Student Loan Rate Increase?
Your student loan rate won’t increase if you have a federal loan since they come with fixed rates. However, if you have a private student loan with a variable rate, your rate might rise if the Secured Overnight Financing Rate (SOFR) increases.
Should I Apply for a Private Student Loan Over a Federal Loan if I Can Qualify for a Lower Rate?
It’s generally wise to exhaust your federal student loan options first since they come with access to unique perks like student loan forgiveness programs and income-driven repayment plans. That said, if you don’t plan on taking advantage of those benefits and can qualify for a lower rate, applying for a private loan might be the better choice for you.
Newsweek writer Jerry Brown contributed to this post.
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