2021 NerdWallet Best-of Awards Winner for Best Student Loan Refinancing Overall Read More
2021 NerdWallet Best-of Awards Winner for Best Student Loan Refinancing Overall Read More


Grad School Loan Rates are Higher Than Undergrad: How to Lower Yours

Kathryn Morstad
Purefy - Compare Private Student Loan Consolidation & Refinance Options Quickly & Easily

Our Award-Winning Team is Here to Help!



NerdWallet rating

Purefy’s student loan experts and comparison engine help you find the best options for your student loans.

100% free to use  |  Personal info encrypted

If you are participating in or have recently graduated from a grad school program, you may be facing a large student loan debt with high interest rates. You may also be looking for ways to easily manage those loans and save money.

Luckily, interest rates are more favorable now than at any time since 2008. It may be a good time to consider your options including refinancing those high interest grad school loans.

Why are Grad School Loan Rates Higher than Undergrad Loans?

There is a significant difference between grad school loans and the undergraduate loans you may have acquired when starting out on your education path. Here’s why:

Federal Loan Rates Set by Congress

Federal loan interest rates are set by congress each year, and graduate interest rates for both Unsubsidized Loans and Grad PLUS loans are typically much higher than those offered to undergraduates.

Increased Borrowing Capacity

Take Stafford loans as an example. Undergraduates can borrow up to $5,500 in the first year, $6,500 in the second, and $7,500 for each subsequent year. The total maximum is capped at $31,000.

However grad students can borrow up to $20,500 per year and have a maximum cap of $138,500 (and even more for certain health-related professions).

No Access to Subsidized Loans

As an undergraduate, you have access to subsidized loans.  With subsidized loans, interest doesn’t start to accrue until you graduate or drop down below half time attendance (usually considered 6 or less credit hours) and are no longer considered full time.

With grad school, there are only unsubsidized loans available which means that interest starts to accrue as soon as you sign the papers.

Historically, What Have Been the Rates for Grad School Loans?

While the cost for grad school has continued to go up, the interest rates charged on federal loans has been more of a rollercoaster. Both direct unsubsidized loans and direct PLUS loans went down during the 2013-2014 academic year but have been slowly rising since that time.

Fixed Interest Rates for Direct Unsubsidized Loans

2019-2020       6.08%

2018-2019       6.6%

2017-2018       6.0%

2016-2017       5.31%

2015-2016       5.84%

2014-2015       6.21%

2013-2014       5.41%

2012-2013       6.8%

2011-2012       6.8%

2010-2011       6.8%

Fixed Interest Rates for Direct PLUS Loans

2019-2020       7.08%

2018-2019       7.6%

2017-2018       7.0%

2016-2017       6.31%

2015-2016       6.84%

2014-2015       7.21%

2013-2014       6.41%

2012-2013       7.9%

2011-2012       7.8%

2010-2011       7.8%

The good news is that with the federal funds rate at 0%-.25% (as set by the Federal Open Market Committee – the “Fed”), student loan rates should be at historic lows for the foreseeable future.

How to Get a Lower your Grad School Loan Rate and Save Money

If you find yourself with high interest grad school loans, you may be able to save considerable money by refinancing to a loan with better terms.  Private lenders offer flexible loan options with fixed or variable interest rates and repayment periods.

With outstanding credit, fixed and variable rates can be as low as 3.49% and 1.24%, respectively.

On the flip side, private lenders will require their debtors to meet credit worthiness standards that will include a credit check and income verification as part of the final process. If you don’t think you would meet the lending criteria, consider finding a family member or friend who does and ask them to be your co-signer.

With a private refinance, you will also lose access to all of the federal loan repayment options, such as deferment and income-driven repayment plans.

Key Benefits Student Loan Refinancing

Besides saving perhaps thousands of dollars over the life of your grad school loans, you will also find these potential benefits:

  • With lower interest, you can secure a lower monthly payment that will free up cash for other things.
  • You can consolidate multiple loans into a single loan for a more manageable budget and just one monthly payment.
  • You can increase your payment by shortening the repayment period and pay your loan off sooner.  This will accelerate your ability to focus on other life choices, like buying a house or starting a business.
  • You can reduce your monthly payment by extending your repayment timeframe which will give you a better debt-to-income ratio and improve other financing options, i.e., a mortgage or car loan.

Is Student Loan Refinancing Right for You?

Find out how much you can save with these top lenders

Precision Pricing: Pick Any Term Between 5—20 Years

Fixed Rate:

2.98% – 5.79% APR

Variable Rate:

1.99% – 5.64% APR


5 – 20 years

Minimum Income:

No minimum

Loan Limits:

$5,000 – $500,000

Refinance Student Loans With Your Spouse

Fixed Rate:

2.99% – 5.15% APR​

Variable Rate:

2.16% – 4.46% APR​


5, 8, 12, or 15 years

Minimum Income:

No minimum

Loan Limits:

$7,500 – $300,000

Loans Available Nationwide — Not Just for Iowans

Fixed Rate:

2.55% – 6.42% APR​

Variable Rate:

Not offered


5, 7, 10, 15, or 20 years

Minimum Income:

No minimum

Loan Limits:

$5,000 – $300,000

Find Your Lowest Student Loan Refinance Rate

Once you decide that refinancing is the best option for your financial situation, then you have to wade through tons of sites offering advice and information. It can be overwhelming.

Purefy understands the market and has put together a rates comparison tool that will help you navigate the top lenders in the industry and get the best rate options based on your particular set of circumstances. And there’s no impact to your credit report for an initial pre-qualifying rate check.

By taking a few minutes to fill out some standard personal info, our tool will provide you with a comprehensive list of pre-qualified offers from national lenders. You can then take the time that you need to review your options and consider the scenario that best meets your long-term financial goals and budget.

Next Steps…

If you have high student loan debt from grad school loans, you can refinance to a lower rate and save money. And whether you want to pay your debt off sooner, or stretch out those payments for a longer period, we can help you find the right lender to make that happen.

In addition, different lenders have unique benefits and Purefy is available to help you traverse the options. All of your answers can be found in one place with award-winning customer service and access to the industry’s best and most trusted lenders.

Find savings from the best lenders with Purefy

Compare Student Loan Refinance Rates with No Impact to Your Credit Score

What is your loan type?

Student Loan Refinancing
Parent Loan Refinancing
You Might Also Like
purefy recommends

Student Loan Refinancing

Refinancing from 1.99% APR

Check your rate in 2 minutes

with no impact on your credit score.


What is your loan type?

Student Loan Refinancing
Parent Loan Refinancing

Student Loan Refinance Interest Rates

Hit a Historical Low

Today’s refinance rates are lower than ever, but that won’t last long. Lock in a historic low rate before they rise again.

Student Loan Refinance Interest Rates

Hit a Historical Low

Today’s refinance rates are lower than ever, but that won’t last long. Lock in a historic low rate before they rise again.