For the second year in a row, student loan interest rates are on the rise. The latest increase will take affect for any federal education loans issued after July 1, 2018, impacting undergraduate students, graduate students and parents of students taking out loans from the Department of Education.

The New Federal Student Loan Interest Rates for the 2018-19 Year

Undergraduates: 5.05%, up from 4.45%
Graduate students: 6.6%, up from 6%
Graduate students and parents with PLUS loans: 7.6%, up from the current 7%

Though these upticks of less than a percentage point may seem small, they can translate to borrowers paying hundreds of dollars more in interest over the life of their loan.

It's important to note that these rates affect only loans taken out for the 2018-19 year and are set for the lifetime of the loan until it is paid off (unless the borrower chooses to refinance under a different interest rate). Fixed rates for student loans taken out in previous years will remain the same. In other words, it's not uncommon for a student with multiple loans taken out in different years to have several interest rates to work with.

These increases have been anticipated following indications of healthy U.S. economic growth. Whether rates will continue to increase remains to be seen, but the silver lining is that they can only increase so much — Congress set a ceiling to cap undergraduate loan rates at 8.25%, graduate loans at 9.5% and PLUS loans at 10.5%.

This article has been updated on June 15, 2018, to reflect current figures.