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Federal student loan interest rates in the U.S. are expected to rise slightly for the 2026-27 academic year, according to an analysis shared with CNBC on Tuesday by higher education expert Mark Kantrowitz.

The projected increase would apply to federal student loans issued between July 1, 2026, and June 30, 2027. The federal government sets student loan interest rates once each year based partly on Treasury yields.

Federal student loan rates are typically fixed for the life of the loan, meaning new borrowers next academic year could face higher repayment costs over time, according to CNBC’s reporting on Tuesday.

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Kantrowitz based his estimates on the U.S. Treasury Department’s May auction of the 10-year Treasury Note, where the high-yield rate reached 4.47% Tuesday.

Kantrowitz estimated undergraduate federal student loan rates could rise to 6.52% from 6.39%. Graduate student loan rates may increase to 8.07% from 7.94%, while Parent PLUS loan rates could climb to 9.07% from 8.94%.

The analysis showed borrowing $10,000 under the projected undergraduate rate would result in monthly payments of about $113.64 under a standard 10-year repayment plan. Total repayment over the decade would increase by roughly $76 compared with current rates.

The higher rates are expected to take effect as the proposed “One Big Beautiful Bill Act” eliminates several affordable student loan repayment and debt relief options for financially struggling borrowers.

More than 42 million Americans currently hold student loans, while total outstanding federal education debt exceeds $1.6 trillion.

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Repayment Pressure Continues To Build

The expected rate increases come as student loan repayment stress continues rising across the U.S.

Earlier reporting showed more than 7 million borrowers will need to transition out of the Biden-era SAVE repayment program after a federal court struck down the plan in March. Alternative repayment plans generally require borrowers to contribute a larger share of discretionary income toward monthly payments.

Federal Reserve Bank of New York data previously also showed serious delinquency rates on student loans had climbed above 16%. Around 7.7 million student borrowers were already in default at the end of 2025, representing roughly $180 billion in troubled loans.

Treasury Yields Remain Elevated

Treasury yields have also remained elevated amid rising U.S. borrowing needs and inflation concerns. Earlier this month, Treasury Department documents showed the U.S. government may need to borrow more than $2 trillion from private markets in fiscal 2026, adding pressure to financing costs across the economy.

Image via Shutterstock

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