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The cost of higher education is continuing to climb, making it tough to pay out of pocket for all of the expenses associated with getting a college degree. The price tag for college now averages $38,270 per student per year, including books, supplies and daily living expenses — so for many college students, a critical piece of the back-to-school puzzle is securing student loans and getting the best rates possible to keep the costs down. Luckily, federal student loan rates are actually decreasing for the 2025-26 academic year, which automatically offers some modest relief.
Federal undergraduate loan rates will drop to 6.39% for loans disbursed between July 1, 2025, and June 30, 2026, down from 6.53% the previous year. This federal student loan rate decrease won’t dramatically lower your monthly payments, but any rate decline is welcome in today’s economic environment. And, if you’re planning to turn to private student loans to fill in the funding gaps, there’s a good chance that you could find more competitive rates, especially if you have good credit or a creditworthy cosigner.
But while lower student loan rates are available to many borrowers this fall, chances are that they won’t just fall in your lap. You typically have to do a bit of legwork to find them. Below, we’ll show you how to get started.
Start comparing your fall 2025 student loan options online now.
How to get a low student loan rate for fall 2025
Here’s how you can find a low rate on your student loans for the fall 2025 semester:
Start with federal loans first
You may not think that you qualify for federal loans or grants, but before you borrow privately, it’s important to maximize your federal funding options. So, you should take time to complete the Free Application for Federal Student Aid (FAFSA), which could give you access to FAFSA-based grants, scholarships from your university or local community and federal unsubsidized and subsidized loans.
Federal undergraduate loans for the 2025-2026 school year carry a 6.39% fixed rate, while graduate loans come with 7.94% and PLUS loans have 8.94%. These rates apply to everyone regardless of credit score and federal loans come with valuable protections like income-driven repayment plans and potential forgiveness programs.
Find out how affordable a private student loan could be now.
Shop around among private lenders for better rates
Banks, credit unions and online lenders all offer a wide range of student loan products, so compare APRs, fees and repayment terms and use online loan comparison tools to determine which options are available (and most affordable) to you. Different lenders may also specialize in different borrower profiles and degree types. Some offer better rates for STEM fields, for example, while others may offer better rates for graduate programs or borrowers without cosigners. It could also make sense to apply to several lenders within a short timeframe to minimize the impact on your score while maximizing your rate options.
Optimize your credit profile before applying
Private lenders evaluate multiple factors when setting your rate, including your credit score, debt-to-income ratio, degree type and sometimes even your field of study and future earning potential. So, if your credit score is below excellent, it could pay off to take time to try and improve it by paying down credit cards, avoiding new debt and catching up on any late payments. For example, raising your score from 690 to 720 could move you from a “good” to “very good” rate bracket, potentially saving you thousands in interest charges over time.
Use a cosigner if possible
Many students are just starting to build their credit profiles and may not have steady income streams yet, and if you’re one of them, you could qualify for far better rates if you have a cosigner who has strong credit. Talk to parents, legal guardians or trusted mentors to see if any are willing to cosign for you. Even if they step aside later through cosigner release options, their initial support could lock you in at a better fixed or variable rate.
Take advantage of rate discounts and incentives
Most private lenders offer automatic discounts when you enroll in autopay from a checking or savings account, so inquire about these opportunities as you shop around. Some lenders also provide loyalty discounts for existing customers, academic performance bonuses for maintaining high GPAs or profession-specific rate reductions for in-demand fields. These small percentage point reductions can add up to meaningful savings over the life of your loan.
Consider shorter repayment terms for lower rates
Many private lenders offer their best rates to borrowers who choose shorter repayment periods, typically five to 10 years instead of the standard 10- to 15-year terms. While this increases your monthly payment, it can also significantly reduce your interest rate and total interest paid. So, if you can afford higher monthly payments, this strategy can save thousands in total borrowing costs.
The bottom line
Getting a low student loan rate for fall 2025 typically comes down to timing, preparation and comparison. Start with federal aid, which still offers the most borrower-friendly terms, then explore private loan options with a strong credit profile or a qualified cosigner. The more you prepare now by improving your credit, researching lenders and locking in rates before potential increases, the more you’ll save over the long haul.
