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Student loans are complicated, especially when it comes to figuring out how much the loan will actually cost you over time. The annual percentage rate (APR) reflects the total cost of the loan, including the interest rate and any fees.

Knowing how the APR affects the cost of your student loans is an important part of maintaining financial health, and can even help you decide whether or not you should look into alternative loan repayment strategies, such as consolidation or refinancing.

What Is the APR for Student Loans?

Your APR is a broader measure of the cost of borrowing than the interest rate and generally reflects the interest rate plus fees or other charges you pay to get the loan (such as origination fees). Interest may also be capitalized (added to your loan balance) after certain periods, such as deferment or forbearance, which can increase what you owe over time.

APR vs Interest Rates on Student Loans

The interest rate on your student loan is the amount your lender is charging you for the loan, expressed as a percentage of the amount you borrowed. For example, the interest rate for Federal Direct Subsidized Loans and Unsubsidized Direct Loans (for undergraduate students) is 6.39% for loans first disbursed between July 1, 2025, and June 30, 2026, which means that you would be responsible for paying your lender 6.39% of the amount of money you borrowed in yearly interest.

That 6.39%, however, doesn’t include other costs considered in the APR, such as origination charges and other lender fees. For loans with no fees, it’s possible that the APR and interest rate will match. But in general, when comparing APR vs. interest rate, the APR is considered a more reliable and accurate explanation of your total costs as you pay off your student loans.

If you’re shopping around for student loans or planning to refinance your loans, the APR offered can help you decide which lender you would like to work with.

Recommended: Student Loan Info for High Schoolers

An Example of How APR Is Calculated for Student Loans

Let’s say you take out a student loan for $20,000 with an origination fee of $1,000 and an interest rate of 5%. An origination fee is the cost the lender may charge you for actually disbursing your loan, and it is usually taken directly out of the loan balance before you receive your disbursement.

So, in this example, even though you took out $20,000, you would only receive $19,000 after the disbursement fee is charged. Even though you only receive $19,000, the lender still charges interest on the full $20,000 you borrowed.

The APR accounts for both your 5% interest rate and your $1,000 origination fee to give you a new number, expressed as a percentage of the loan amount you borrowed. That percentage accurately reflects the true costs to the consumer. (In this example, if the loan had a 10-year term, the APR would be 6.125%).

What Is a Typical Federal Student Loan APR?

For federal student loans, interest rates are determined annually by Congress. Federal loans also have a loan fee, which is charged when the loan is disbursed.

Total borrowing costs for federal student loans may vary depending on the loan repayment term that the borrower selects. Federal student loans are eligible for a variety of repayment plans, some of which can extend up to 25 years. Generally speaking, the longer the repayment term, the larger the amount of interest the borrower will owe over the life of the loan.

Typical APR for Private Student Loans

The interest rate on private student loans will vary by lender, and so will any fees associated with the loan. As of February 26, 2026, private student loan interest rates ranged from about 2.99% to about 17.99%, depending on creditworthiness.

The interest rate you qualify for is generally determined by a variety of personal factors, including your credit score or credit history. In addition to varying rates and fees, private student loans don’t offer the same benefits or borrower protections available for federal student loans, such as income-driven repayment plans or deferment options. For this reason, they are generally considered only after all other sources of funding have been reviewed.

How to Find Your Student Loan APR

By law, lenders are required to disclose the APR on their loans — including private student loans. These disclosures help you make smart financial choices about your loans and ensure that you’re not blindsided by unexpected costs when you take out a loan.

For federal student loans, the government lists the interest rates and fees online, but make sure to carefully examine any loan initiation paperwork for your exact APR, which will depend on other factors, including the amount you plan to borrow, the interest rate, and origination fees.

If you’re currently paying off federal student loans, your student loan servicer can tell you your interest rate. If you use online payments, you can probably see your APR on your student loan servicer’s website or on your monthly bill.

If you’re shopping around for private student loans, your potential lenders must disclose the APR in their lending offer to you. Your APR will vary from lender to lender depending on many factors, which can include your credit score, any fees the lender charges, and how they calculate deferred interest, which is any unpaid interest that your minimum payment doesn’t cover.

One student loan tip — compare quotes and offers from various lenders closely. Once you’ve decided on a lender and taken out a loan, your APR should be reflected on your loan paperwork and usually on your lender’s online payment system.

Recommended: Understanding a Student Loan Statement: What It Is & How to Read It

The Takeaway

The APR is a reflection of the total amount you’ll pay in both interest rate and fees for borrowing on a student loan. The interest rate is just the amount of interest you will be charged. On loans with no fees, the interest rate and APR can be the same. Interest rates and fees for different types of federal student loans are published, but individual APRs may vary based on the amount you borrow and the repayment term you select.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

FAQ

What is the APR on student loans?

The APR, or annual percentage rate, is a reflection of the interest rate plus any fees associated with the loan. It provides a picture of the total cost of borrowing a loan and is helpful in comparing loans from different lenders.

Is the APR the same on subsidized and unsubsidized student loans?

The interest rate for unsubsidized and subsidized federal student loans is set annually by Congress. These loans also have an origination fee. The interest rate on Direct Subsidized and Unsubsidized loans is 6.39% for loans first disbursed between July 1, 2025, and June 30, 2026. The APR for your loan will be determined by factors including the repayment term you select.

What is the typical interest rate on private student loans?

Interest rates on private student loans vary based on factors such as the lender’s policies and individual borrower characteristics, such as their credit score and income. As of February 26, 2026, private student loan interest rates ranged from about 2.99% to about 17.99%, depending on creditworthiness.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Not all repayment options may be available for all loans. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is current as of 3/2/2026 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org).

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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOISL-Q126-049

If you’ve finished graduate school, you’re likely looking for a job or are already working in your preferred area of study. Which is all good. But you may also be looking at a pile of grad school debt and wondering how you can make it go away ASAP.

If the interest rate on your federal or private loan (or loans) is higher than current rates, if you’re finding your monthly payments too high, or if you’re juggling multiple payments on different loans for school each month, you might want to consider graduate school loan refinancing.

Here, you’ll learn what graduate student loan refinancing is, what the pros and cons are, and how to tell if it’s right for you.

What Is Graduate Student Loan Refinancing?

Can you refinance student loans? Absolutely!

Graduate school federal or private loan refinancing works like any other kind of loan refinancing: It’s a modification of an ordinary student loan that involves taking out a new loan to pay off your existing graduate school loans.

Even if you had multiple loan payments and multiple interest rates before, you’ll now have a single monthly payment and one interest rate, which may (or may not) be lower than the rate on the original loan or loans.

There are two important points to consider when thinking about student loan refinancing:

•   If you refinance for an extended term, you’re likely to pay more interest over the life of the loan, even though your monthly payment may be lower.

•   When you refinance a federal loan using a private loan, you forfeit the benefits and protections of federal loans.

💡 Quick Tip: Get flexible terms and competitive rates when you refinance your student loan with SoFi.

How Does Refinancing Grad School Loans Work?

So, why would you want to consider refinancing your graduate school loans? Here are some of the benefits:

•   One single monthly payment

•   Possibly a lower interest rate

•   Potential to lower your monthly payment

First, if you’re making multiple payments for more than one school loan up to your graduate school loan limit, you might feel like you’re treading water and getting nowhere in actually paying off the loans. With private refinancing, you end up with one monthly payment, and it may be easier to adjust your payments to pay down the loan more quickly, as you’re not restricted to a certain income percentage or fixed figure.

If the interest rate you got on your original student loans for grad school was high, you might be able to save money with a lower rate by refinancing. If you’ve got great credit, you could qualify for low interest rates.

And if you’ve been struggling to make your monthly payment(s), you may be able to refinance for a longer period to reduce that monthly amount. However, as mentioned above, you may pay more in interest over the full life of the loan.

To refinance graduate student loans:

•   Shop around among lenders who specialize in refinancing.

•   Calculate your student loan refinancing savings for each option on offer, as rates can vary drastically from one lender to another.

•   Find one lender that offers good rates and terms. And remember: The better your credit score, the better the terms you may qualify for.

•   Apply for your new loan.

•   Once approved, pay off your student loan debt. You’ll begin payments on the new loan within a few weeks.

Recommended: Undergraduate vs. Graduate Student Loans

Pros and Cons of Refinancing Grad School Loans

When you’re considering graduate school loan refinancing, it’s important to look at the benefits, as well as the drawbacks.

If you’re refinancing federal student loans, remember, you’ll forfeit federal benefits and protections.

The Pros

As noted in the chart, these are the main advantages of refinancing your graduate student loans:

•   You may be able to get lower interest rates and a reduced monthly payment, and you could roll what you’ve been paying on multiple loans into one monthly payment. But note you may pay more interest over the life of the loan if you refinance with an extended term.

•   This could make it easier and faster to pay off your grad school loan.

•   If you’ve been struggling to pay your loan, refinancing could make it easier to pay on time, which could help build your credit. If your credit score rises, you could potentially qualify for better terms.

And if you’ve felt confused or lost about how to refinance your loan, you’re in the right place. SoFi’s got lots of resources for guiding you through student loan refinancing.

The Cons

Now, to review the potential downsides:

•   When you refinance a federal student loan with a private student loan, you forfeit federal benefits and protections, such as forbearance.

•   If your credit isn’t great, you might only qualify for loans with higher interest rates, which could cause you to pay more for your refinanced loan.

•   If you don’t qualify for graduate loan refinancing, you might need to have a cosigner to get approval, which can be a challenging step.

•   If you refinance for an extended term, you may pay more interest over the life of the loan.

•   When you apply for a new loan, it requires a hard credit pull, which can temporarily lower your credit score.

Alternatives to Refinancing Graduate School Loans

If you aren’t able to or don’t want to refinance your graduate loans, there may be other options for you to lower your payments:

•   If you took out a federal loan through the U.S. Department of Education, you may qualify for one of several annually certified income-driven repayment plans, including, from July 2026, the new Repayment Assistance Plan. You’ll need to meet the income and household size requirements.

•   You may also qualify to defer payments. There are deferment plans for unemployment, economic hardship, military service, cancer treatment, and more.

•   If you work in certain areas of public service, such as teaching or employment with a nonprofit, you might qualify for Public Service Loan Forgiveness. You may be required to work in a qualifying role for a certain number of years to receive forgiveness for your student loan.

Keep in mind that if your graduate loans aren’t federal loans, these options won’t be available to you.

Another option is simply to get aggressive about paying down your loan. This might require setting aside things you usually spend money on, such as clothes and vacations, for a while, or perhaps taking in a roommate. But once you pay off your grad school debt, you can resume those luxuries.

Recommended: Refinancing Student Loans vs. Income-Driven Repayment Plans

The Takeaway

If you’re struggling to pay your student loan or if you feel your interest rate is too high, graduate school loan refinancing could provide some relief and help you save money. The process can replace one or more monthly payments with a single payment, potentially for a lower amount, though this may involve extending the term and paying more interest over the life of the loan. Refinancing federal loans with a private loan, however, does involve forfeiting federal benefits or protections, so it may or may not be the right choice for you.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

FAQ

Is refinancing graduate school loans any different than other student loans?

Refinancing a graduate school loan works like it would for undergraduate student loans. Be aware that by refinancing, you might lose benefits you had with your federal student loan, such as the ability to defer or change to an income-driven repayment plan.

Is it easy to refinance graduate student loans?

Refinancing grad school loans, particularly if you have good credit, is fairly simple. Find a provider that offers competitive rates, get approved, pay off your previous student loans, and then start paying down your new loan.

What are the advantages of refinancing graduate student loans?

Refinancing student loans for grad school may help you get a lower interest rate. It could also help you by consolidating multiple student loans into one monthly payment, and you could lower your monthly payment amount. Just keep in mind that you may pay more interest over the life of the loan if you refinance with an extended term.

Photo credit: iStock/NeonShot

SoFi Student Loan Refinance
Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.