Compare monthly payment, fees, and total cost before you borrow
| Loan Type (first disbursed 7/1/26–6/30/27) | Interest Rate | Origination Fee | 2025-26 Rate |
|---|---|---|---|
| Direct Subsidized (undergrad) | 6.52% | 1.057% | 6.39% |
| Direct Unsubsidized (undergrad) | 6.52% | 1.057% | 6.39% |
| Direct Unsubsidized (graduate) | 8.07% | 1.057% | 7.94% |
| Direct PLUS (parents, grad) | 9.07% | 4.228% | 8.94% |
Federal rates are fixed for the life of the loan and reset each July 1 from the May 10-year Treasury auction. Private rates below are national advertised and survey ranges as of August 2026; your actual offer depends on credit, cosigner, term, and in-school repayment choice.
| Market Segment | Typical Fixed APR | Source Anchor |
|---|---|---|
| Best advertised (strong credit + cosigner) | from ~3.6% | Lender minimums (Credible, Bankrate surveys) |
| Market average, 10-year fixed | ~9.1% | Forbes advisor survey, July 2026 |
| Top of market (thin credit, no cosigner) | 15%–16%+ | U.S. News lender survey max (avg max 15.12%) |
Variable APRs start lower (~3.7% best advertised) but move with the market, which is a poor fit for a 10-year payoff. Most undergrad private borrowers need a cosigner to reach the advertised minimums.
Both loans are priced on the same basis: the cash you actually need delivered to the school. That matters because federal loans skim an origination fee off the top before disbursing, so a $20,000 tuition bill needs $20,214 of federal debt at the 1.057% fee (or $20,883 of PLUS at 4.228%). The calculator grosses the principal up for you, then runs a standard 10-year amortization on each side at the rates you enter.
Principal = cash needed ÷ (1 − origination fee). Monthly payment = P × r ÷ (1 − (1 + r)−n), where r is the monthly rate and n the number of payments. Total repaid = payment × n, and total interest is the difference from principal.
Enter the amount you're still short after grants, scholarships, and federal loans you've already taken. Pick your federal loan type (the rate and fee fill in automatically), then paste in an actual private offer if you have one — the 9.10% default is the July 2026 market average for a 10-year fixed, not a quote.
You need $20,000 delivered, with a 10-year repayment. Federal side: a $20,213.66 principal at 6.52% costs $229.73 a month, $27,567 total, $7,354 of it interest. Private side at the 9.10% market average with no fee: $254.44 a month, $30,532 total, $10,532 interest. Private runs $24.71 a month more, which quietly becomes $2,965 over the life of the loan.
Flip the scenario and the comparison gets interesting. A Parent PLUS loan at 9.07% with the 4.228% fee turns $20,000 into $20,883 of debt at $265.33 a month. A private loan at 8.50% with no fee costs $247.97 a month and saves $2,083 over ten years. That's the one case where private routinely wins on math — and it's why parent borrowers shop both. What the math can't show is what federal loans throw in for free: income-driven repayment, deferment during job loss, and Public Service Loan Forgiveness. Price those into the decision, not just the APR.
The honest rule of thumb: exhaust Direct Subsidized and Unsubsidized loans before touching private debt, compare private offers against PLUS (not Direct undergrad) rates, and refinance federal to private only when your income is stable, your emergency fund is real, and you're giving up forgiveness eligibility on purpose.
Start with federal loans in almost every case. They carry fixed rates set by Congress (6.52% for undergrad Direct loans in 2026-27), income-driven repayment, deferment and forbearance options, and forgiveness paths like PSLF that private loans simply do not offer. Private loans make sense when you have hit the federal borrowing limit and a creditworthy cosigner can beat the PLUS rate of 9.07%.
Sometimes. Advertised private fixed APRs started around 3.6% for borrowers with strong credit and a cosigner as of August 2026, below the 6.52% federal undergrad rate. But the market average for a 10-year fixed private loan was near 9.1%, and thin credit pushes offers to 15% or more. The low advertised rates go to a small share of applicants; the rate you actually get depends on credit.
For loans first disbursed on or after July 1, 2026 and before July 1, 2027: Direct Subsidized and Unsubsidized loans for undergraduates are 6.52%, Direct Unsubsidized loans for graduate students are 8.07%, and Direct PLUS loans for parents and grad students are 9.07%. All are fixed for the life of the loan. The year before was 6.39%, 7.94%, and 8.94%.
They add a little. Direct Subsidized and Unsubsidized loans carry a 1.057% fee, so borrowing $20,000 means repaying $20,214. PLUS loans carry 4.228%, which turns a $20,000 need into $20,883 of debt. Most private lenders charge no origination fee, which is one reason a private rate slightly above the federal rate can still lose, or a slightly lower one can win by more than it looks.
No. There is no path from a private loan into the federal program. Refinancing federal loans into a private one is a one-way door: you give up income-driven repayment, forgiveness eligibility, and federal deferment. The reverse move does not exist, so treat the federal-first order as close to irreversible.
On $20,000 delivered to the school over a 10-year term, the 2026-27 federal undergrad loan (6.52%, 1.057% fee) costs about $229.73 a month and $27,567 total, while a private loan at the market-average 9.10% fixed costs $254.44 a month and $30,532. That is roughly $25 a month and $2,965 over the life of the loan.