Look for increased student loan interest rates on new loans. – Taking out new student loans will cost more in July when interest rates on those loans rise, the US Treasury Department said Wednesday.

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The increase will only apply to those taking out new student loans. If you have already taken out a loan, the old interest rate will remain in effect.

Interest rates for federal student loans are set by Congress. As it stands, loan interest rates are tied to the 10-year Treasury yield plus a premium.

Student loan rates are set in the spring and are in effect from July 1 to June 30 of the following year.

The new prices are:

Subsidized and unsubsidized direct loans for undergraduate students: 4.99%, down from 3.73%

Direct unsubsidized loans for graduates and professionals: 6.54%, down from 5.28%

Direct PLUS loans for parents and graduate or professional students: 7.54%, down from 6.28%.

For student loan payments that have been suspended due to the COVID-19 pandemic, the rate will not change when student loan payments resume after August 31.

Last month, President Joe Biden said he would consider some sort of student loan forgiveness for loans taken out before and during the pandemic.

“I plan to face some debt reduction. I’m not looking at a $50,000 debt reduction,” Biden said. “But I’m looking closely at whether or not there will be further debt forgiveness, and I’ll have an answer on that within the next two weeks.”

Biden has signaled he is more comfortable with debt forgiveness on the order of $10,000 and has previously supported legislation to forgive $10,000 in student debt per borrower.

Biden would also consider some sort of means test for any student loan relief, White House press secretary Jen Psaki told reporters.

“He’s talked in the past about how, you know, he doesn’t think millionaires and billionaires, obviously, should benefit from this, so that’s definitely something he would look into,” she said. declared.

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