How Will the Fed Rate Hike Affect my Student Loans?

If your student loans were issued by the federal government since 2010, you will not see a change in interest rates. Because the interest rates were set the year the loan was issued and are fixed for the lifetime of the loan.

If your direct student loans were issued before 2006 they are likely variable rate student loans, and an increase in interest rates will cause the rates on your student loans to rise.

If you have private student loans issued through a commercial bank or private company, then you should first determine if your loans are fixed or variable loans. If your student loans are fixed rate loans then they won’t be affected by any interest rate increases by the Federal Reserve. However, if you have variable rate loans you will likely see interest rates increase.

So if you are worried that your interest rates are poised to go up, well fear not, because at the moment rates are still at historical lows. So it’s a good time to start shopping around to see if you can refinance your loans at a low, fixed rate.