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2025–2026 Student Loan Interest Rates Are Out: What Parents & Students Need to Know

by BlogCollege planning

If you’re planning ahead for college this fall (starting in Fall 2025), you’ve probably started thinking about student loans. Whether you’re a parent preparing to help or a student navigating your first year, understanding your loan options is key to avoiding unnecessary debt and costly surprises down the road.

The U.S. Department of Education has just released the new federal student loan interest rates for the upcoming school year—and while they’ve dipped slightly from last year, they still remain relatively high.

Here’s what you can expect for loans disbursed on or after July 1, 2025:

Federal Student Loan Interest Rates (2025–2026)

6.392% – Undergraduate Federal Direct Loans
7.942% – Graduate Federal Direct Loans
8.942% – Federal Direct Grad PLUS Loans
8.942% – Federal Direct Parent PLUS Loans

This marks a 0.141% decrease from the previous year. The Department of Education is expected to update their official website by the end of the month.

Understanding Your Options

1. Federal Direct Loans (Undergraduates)

These include both subsidized and unsubsidized loans, and the 6.392% interest rate applies to both.
Subsidized loans are based on financial need. The government covers the interest while the student is in school, during the grace period, and during deferment.

Unsubsidized loans are available to all students regardless of financial need. Interest begins accruing immediately.

2. Federal Direct Loans (Graduate Students)

These are unsubsidized and carry a 7.942% interest rate. Interest accrues as soon as the loan is disbursed.

Direct PLUS Loans (Grad PLUS & Parent PLUS)
These loans carry the highest rate—8.942%—and come with a 4.228% origination fee.
Parent PLUS Loans are for biological or adoptive parents (and in some cases, stepparents) of dependent undergraduate students.
They require a credit check (not based on income or need).

Repayment starts immediately, although deferment options are available while the student is enrolled.

Note: Parent PLUS Loans are not eligible for income-driven repayment unless consolidated into a Direct Consolidation Loan.

My Recommendations

1. Delay Borrowing If You Can

If you have access to 529 plans, scholarships, cash savings, or payment plans, consider using those for freshman year to delay interest accrual on student loans. Every month you delay borrowing is money saved in the long run.

2. Watch the Loan Acceptance Process

Some schools automatically apply federal student loans unless you opt out. Others require students to log into their college portal and actively check a box to accept the loan—even the standard $5,500 freshman loan. Make sure you understand how your college handles this and take action early.

Be Strategic About Parent PLUS Loans

With a high interest rate and origination fee, these loans should be considered carefully. Before taking one, compare:

  • Private student loan options
  • State-based loans (like MEFA in Massachusetts) Whether you can qualify for better terms elsewhere

How MEFA Compares to Parent PLUS Loans (For Massachusetts Families)

If you’re a Massachusetts resident, be sure to explore the Massachusetts Educational Financing Authority (MEFA). MEFA offers low-fixed-interest, credit-based private education loans for students and parents—and they often come with more competitive terms than the federal Parent PLUS Loan.

Here’s how MEFA stacks up:

  • Lower Interest Rates: MEFA typically offers lower fixed interest rates than the federal Parent PLUS Loan’s 8.942%, depending on credit and loan term.
  • No Origination Fees: Parent PLUS Loans have a 4.228% upfront fee. MEFA loans do not.
  • Flexible Repayment Options: Choose from immediate, interest-only, or deferred repayment plans.
  • Local Support: MEFA is a nonprofit dedicated to helping Massachusetts families make college more affordable, with transparent tools and free guidance.

MEFA doesn’t replace federal aid like subsidized/unsubsidized Direct Loans, but it’s often a smarter alternative to Parent PLUS Loans for families with strong credit.

Learn more: MEFA.org

What If You’re Heading to Grad School?

Good news: If you’re an undergraduate who already has federal loans and you enroll in graduate school at least half-time, your undergrad loans automatically enter deferment—you don’t have to start repaying them right away.

Subsidized loans will not accrue interest during this deferment.

Unsubsidized loans will continue to accrue interest, but payments are paused.
Just make sure your enrollment is reported correctly—some grad schools do this automatically, others may require a form or manual update.

Resources to Help You Navigate

  • Federal Student Aid: Loan Types & Info
  • Loan Simulator Tool
  • Understanding Interest Rates
  • MEFA (Massachusetts Educational Financing Authority)

Need Help? Let’s Talk.

Choosing the right mix of loans and timing can save you thousands. Whether you’re not sure which boxes to check, want a second opinion, or would prefer someone to handle the steps for you, I’m here to help.

Let’s schedule a time to walk through your options.
Because college should build your future—not bury you in debt.

Bonus Resource:
If you or someone you know is stepping into the post-college world, don’t miss my free resource: A Financial Guide for New Grads. It’s packed with actionable tips to help recent graduates start strong with budgeting, saving, investing, and navigating early career decisions.

 

Group of diverse grads throwing caps up in the sky

13 Financial Tips for Recent Grads

by BlogCollege planningWealth

Hello graduate. As you step into the working world, the excitement of college graduation is tinged with the anticipation of new beginnings and the pursuit of financial freedom. This milestone marks not only the end of an era but the start of a journey toward achieving independence and control over your financial future. Financial freedom is more than just a lofty ideal; it’s the ability to live life on your terms, free from the constraints of financial stress. As you embark on this path, here are 13 essential tips to help you navigate the complex world of work and money, ensuring you build a life rich with possibilities and choices.

But first, here’s some famous graduation quotes that reinforce the concept of life, work and financial freedom. We think you’ll recognize these people.

  • Steve Jobs – “Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do.”
  • Oprah Winfrey – “You get in life what you have the courage to ask for. Ask for financial literacy, ask for freedom, and work to get it.”
  • Bill Gates – “If you are born poor it’s not your mistake, but if you die poor it’s your mistake. Learn to manage your resources and grow.”
  • Arianna Huffington – “The way to achieve financial freedom is to invest in yourself. Financial literacy is the foundation of independence.”
  • Jeff Bezos – “If you decide that you’re going to do only the things you know are going to work, you’re going to leave a lot of opportunity on the table. Don’t be afraid to take financial risks and learn from them.”
  • Richard Branson – “Financial freedom is not just about money; it’s about being able to live your life on your own terms. Seek out opportunities and work hard to achieve your dreams.”
  • Michelle Obama – “Success isn’t about how much money you make; it’s about the difference you make in people’s lives. Use your financial freedom to give back.”

Drawing from my experience as a financial/retirement educator, writer and speaker, here are some essential financial tips to help you start your financial journey on the right foot.

1. Visualize & Plan Your Life…with Intention

One powerful way to achieve financial freedom is to visualize and plan your life with clear intention. Start by setting both short-term and long-term goals that align with your personal values and dreams. Create a vision board with images and words that represent the places you want to visit, the lifestyle you aspire to, and the causes you want to support. Whether it’s a physical board on your wall or a digital one on your computer, this visual reminder can keep you motivated and focused.

Next, break down these big dreams into actionable steps. Outline specific, measurable goals such as saving a certain amount each month, paying off student loans, or investing in a retirement account. Regularly revisit and adjust your plan as your circumstances and ambitions evolve. By planning your life with intention, you can make informed decisions that bring you closer to the life you envision, ensuring that your financial habits today support your desired future.

2. Can Money Buy Happiness?

It’s essential to understand that while money may not directly buy happiness, it does buy financial security. This security is crucial for enhancing your quality of life and overall well-being. Financial security means having the stability to make choices that align with your values and passions without being constrained by financial worries.

Financial security provides the peace of mind to pursue meaningful experiences, spend quality time with loved ones, and engage in activities that bring joy and fulfillment. It’s about having the ability to live life on your terms, free from the constant stress of financial uncertainty. While money alone won’t make you happy, managing it wisely can create a stable and secure life filled with opportunities and peace of mind.

To read the other 11 tips click here to access the PDF download.

Countdown to College

by College planning

September is the time when we send our kids back to school and for many younger baby boomers, their kids are going off to high school or college. At Her Retirement, we are seeing more and more people with questions about how best to plan for college. We are in the process of putting together our new service, College Bound. Money Found. With this service we’ll be helping families do the proper planning so that college is attainable and more affordable. Here’s some tips to consider as you start the countdown to college.

Most parents want to give their children the best opportunity for success, and getting into the right college may help open doors. According to the Census Bureau, 33% of American adults have a bachelor’s degree, and those with a bachelor’s degree earn 67% more on average than those with just a high school diploma. ¹

Unfortunately, being accepted to the college of their choice may not be as easy as it once was. These days, preparing for college means setting goals, staying focused, and tackling a few key milestones along the way.

Before High School

The road to college begins even before high school. Start by helping your elementary and middle school children develop a love for learning. Encourage good study habits and get them dreaming about college. A trip to a nearby university or your alma mater may help plant the seed in their minds. When your child reaches middle school, take the time to find out which prerequisite courses may set the right track for math and science in high school.

The earlier you consider how you expect to pay for college costs the better. The average college graduate today owes $37,172 in debt, while the average salary for a recent graduate is $49,785.²

Freshman Year

Before the school year begins, consider meeting with your child’s guidance counselor. Discuss college goals and make sure your child is enrolled in classes that are structured to help him or her pursue those goals. Also, encourage your child to choose challenging classes. Many universities look for students who push themselves when it comes to learning. At the same time, keep a close eye on grades. Every year on the transcript counts. If your child is struggling in a subject, don’t wait to get a tutor. One-on-one instruction can be a huge benefit when mastering difficult material.

In addition to academic performance, many colleges want prospective students to be well rounded, so encourage your child to engage in extracurricular activities, such as sports, music, art, community service, and social clubs.

Sophomore Year

During their sophomore year, some students may have the opportunity to take a practice SAT. The practice test is a good way to give your child an idea of what the test entails and which areas need improvement. If your child is enrolled in advanced placement (AP) courses, encourage good performance on AP exams. A solid grade shows universities your child can succeed at a higher level of learning.

Sophomore year is also a good time to get some depth in extracurricular activities. Help your child identify passions and stick to them. Encourage your child to read as much as possible. Whether they read Crime and Punishment or Sports Illustrated, they will expand their vocabulary and critical thinking skills. Summer may be a good time for sophomores to get a job, do an internship, or travel to help fill their quiver of experiences.

Junior Year

Near the beginning of junior year, your child can take the Preliminary SAT, (PSAT), also known as the National Merit Scholarship Qualifying Test (NMSQT). Even if he or she won’t need to take the SAT for college, taking the PSAT could open doors for scholarship money. Junior year may be the most challenging in terms of course load. It is also a critical year for showing good grades in difficult classes.

Top colleges look for applicants who are future leaders. Encourage your child to take a leadership role in an extracurricular activity. This doesn’t mean he or she has to be drum major or captain of the football team. Leading may involve helping an organization with fundraising, marketing, or community outreach.

In the spring of junior year, your child will want to take the SAT or ACT. An early test date may allow time for taking the test again in senior year, if necessary. No matter how many times your child takes the test, colleges will only look at the best score.

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Fast Fact: Pre-Approved. The U.S. Department of Education says that all students, regardless of financial status, are eligible for up to $31,000 in federal Stafford Loans over four years.  Source: U.S. Department of Education, 2017

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Senior Year

For many students, senior year is the most exciting time of high school. They will finally begin to reap the benefits of all their efforts during the previous years. Once your child has decided which schools to apply for, make sure you keep on top of deadlines. Applying early can increase your student’s chance of acceptance.

Now is also the time to apply for scholarships. Your child’s guidance counselor can help you identify scholarships within reach. Also, find out about financial aid and be thorough. According to research by NerdWallet.com, nearly $3 billion in free federal grant money goes unclaimed each year simply because students fail to fill out the free application.³

Finally, talk to your child about living away from home. Help make sure he or she knows how to manage money wisely and pay bills on time. You may also want to talk about social pressures some college freshmen face for the first time when they move away from home.

For many people, college sets the stage for life. Making sure your children have options when it comes to choosing a university can help shape their future. Work with them today to make goals and develop habits that will help ensure their success.

Please reach out to us to discuss your college planning needs and stay tuned for more details on our College Bound. Money Found program.

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South Paws Wanted

Your child doesn’t have to be the high school valedictorian to qualify for a scholarship. In fact, thousands of dollars are awarded each year for the most unusual things. Consider these:

  1. Right-handers need not apply. Frederick and Mary F. Beckley offer $1,000 to lucky left-handed students (who also want to attend Juniata College in Huntington, PA).
  2. Stick It. Duck Brand Duct Tape offers $3,000 to students who go to their high school prom dressed entirely in duct tape
  3. How Tall Is Tall? Tall Clubs International offers $1,000 each year to a tall person attending college. Get out the measuring tape. A woman must be at least 5’10” and a man must be 6’2” or taller to qualify.
  4. Candy Connoisseurs Unite. The American Association of Candy Technologists offers $5,000 to students who have exhibited an interest in confectionary technology.
  5. From “Mr. Top Ten” Himself. David Letterman offers $10,000 to students of Ball State University (his alma mater) who produce an original video, audio, written, graphic, or film presentation.

Source: Financialaidfinder.com, 2017

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  1. Census Bureau, March 2016; Bureau of Labor Statistics, April 20, 2017
  2. U.S. News and World Report, May 9, 2016; Time.com, May 12, 2017
  3. NerdWallet, January 27, 2016

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2017 FMG Suite.