Are Student Loans Fixed or Variable?

October 6, 20220


The interest rate for your student loan depends on a few factors, including whether it’s a federal or private loan and which type of repayment plan you choose. If you’re looking to save money on your loans as soon as possible, there are some ways to compare different types of student loans based on their APR and repayment schedule. Are Student Loans Fixed or Variable?

The interest rate for a federal student loan is the same for everyone.

When you get a federal student loan, the interest rate is fixed for the life of your loan.

Because federal student loans have such low-interest rates, most people are able to pay off their entire loan in 10 years or less (or choose to pay it off much faster).

Interest on a private student loan can be fixed or variable.

If you have a variable-rate private student loan, your interest rate can change based on the market. If interest rates drop, your variable-rate debt will adjust accordingly. On the other hand, if rates rise, so will the amount of money you pay in interest on your loan.

Fixed-rate private student loans have a set interest rate that doesn’t change over time. When you take out one of these loans, it’s important to remember that this means you’ll pay off more than just the principal amount of what you borrow; you’ll also need to pay off any accrued interest as well when repayment begins.

The interest rate you pay depends on the year your loan was disbursed and whether it’s subsidized or unsubsidized.

The interest rate you pay depends on the year your loan was disbursed and whether it’s subsidized or unsubsidized.

Interest rates vary depending on when you took out the loan

If you took out a federal student loan before July 1, 2006, or if your federal student loan was first disbursed between July 1, 2006, and July 1, 2013: The interest rate for these loans is fixed for the life of your repayment plan. This means that even if market conditions change and interest rates go up or down later in life, your monthly payment amount will not change. Interest continues to accrue while enrolled full-time or at least half-time at an eligible school (or during authorized periods of deferment). After graduation from an undergraduate program: Students who have completed their first bachelor’s degree may borrow more money each academic year through a graduate student version of unsubsidized Stafford Loans (Grad PLUS).

Subsidized loans don’t always cost less than unsubsidized loans.

Subsidized loans are based on financial need, so if your family makes too much money for you to receive a subsidized loan, you’ll have to go with an unsubsidized loan. These loans have higher interest rates than the subsidized ones.

Subsidized loans are paid back by the government, which means that you won’t be responsible for repaying any of your tuition or room and board. You do have to pay back other expenses like books, transportation, and living expenses though! If you’re eligible for a job that pays $20 an hour or more (and has been approved by the government), then most of your student loan will be forgiven after 10 years of payments (or 120 qualifying payments).

You want to look at both the annual percentage rate (APR) and the repayment schedule when comparing student loans to make sure that you’re getting the best deal possible.

The APR is the interest rate on a loan expressed as a percentage. It’s an important figure because it gives you a sense of how much it will cost you to borrow money, and it leaves out all sorts of additional costs that may come up.

The APR is calculated over a period of time, but not necessarily the same period for all loans. Some lenders will include fees in their APRs, which makes them appear lower than they really are. Other lenders won’t include any fees at all in their APRs, even though those fees can significantly increase your total payments over time.


We hope this information has helped you understand how to choose between fixed and variable-rate student loans. Remember to consider both the annual percentage rate (APR) and repayment schedule when comparing loans so that you can make sure that you’re getting the best deal possible for your money!