Each year on July 1 the interest rates on federal student loans are updated. This year we are seeing a record low that was previously set in 2005.
New interest rates do not affect existing federal loans, just the new ones. Interest rates on federal student loans are fixed for the life of the loan. Borrowers cannot refinance old federal student loans into new federal student loans to take advantage of the new interest rates.
Borrowers may be able to get lower interest rates by refinancing their federal loans into private student loans. However, borrowers who refinance federal student loans into private student loans lose the superior benefits of federal student loans, such as the current payment pause and interest waiver, death and disability discharges, longer deferments and forbearances, income-driven repayment and loan forgiveness options.
Click Here to download the New Federal Loan Summary that displays the new rates, loan fees, and other details.