Interest is money paid to the\u00a0lender\u00a0in exchange for borrowing money. Interest is calculated as a percentage of the unpaid principal amount (loan amount) borrowed.\r\n\r\nFor federal student loans, Congress sets interest rates on Direct Loans from the U.S. Department of Education through legislation that ties the rate to financial markets. Your loan servicer does not set your loan interest. Log into your servicer's website to view your current student loan rate for each loan.\r\n\r\nFor private student loans, the lender will set the interest rates which are typically based on your credit history and other factors. Having a cosigner may also lower your interest rate as it may strengthen your loan application and lessen the risk of default. Log into your lender's website to view your current student loan rate for each loan.\r\nWhen does student loan interest accrue?\r\nFederally subsidized loans do not accrue interest until after your six month grace period from graduation or leaving school.\r\n\r\nGenerally, federal unsubsidized loans and private student loans begin to accrue interest when the loan is disbursed.