College students or parents looking to take out private student loans will typically have to choose whether they want a .
So which do most select? It’s not even close.
With a surge of new borrowers expected to turn to private student loans starting this summer, U.S. 小萝莉影视 asked private lenders how many of their customers actually opt for the more volatile variable rate over the stable, predictable fixed-rate loan.
We found that fixed-rate student loans win by a landslide. In fact, they make up more than 95% of all loans at some of the top lenders, with one lender reporting that less than 1% of its refinance borrowers picked a variable rate last year.
Fixed-rate student loans provide consistent monthly payments because the interest rate remains constant throughout the loan term. In contrast, variable-rate student loans feature interest rates that can rise or fall based on shifts in the market.
Here’s what we learned from lenders, and why more college borrowers will soon be comparing between fixed and variable rates.
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More Borrowers Have a Choice to Make
Federal student loan limits that go into effect in July are . These loans will fill college funding gaps that federal loans, aid and savings don’t cover.
Researchers estimate that at least $10 billion in yearly graduate student borrowing alone will shift from federal to private, potentially sending hundreds of thousands of borrowers into the private market. Parents, who are also facing more restrictive caps on the amount they can borrow from the government for their kids’ education, will likely bring additional loan demand. Lenders say they expect the private student loan market to ultimately double in total loan volume over the next several years.
There are concerns that . For those who do, they’ll be comparing a loan product that is different and typically more complicated than the federal options. (Although with the taking place, that might be debatable.)
Federal loans make up at least 90% of all student loans, and they only come with fixed rates that are set once a year. Most private lenders, however, offer a choice between fixed and variable rates.
Along with factors like repayment term length, cosigner releases and deferment options, new borrowers will have to decide whether they want their interest rate to remain the same or fluctuate with market conditions.
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How Unpopular Are Variable Rates? Here’s What Lenders Say
Although interest rates were headed lower in 2025, college borrowers weren’t biting on variable rates, even with the chance of their payments decreasing, at least in the short term, lenders say.
For example, private lender reports that a whopping 99.6% of student loan refinance borrowers chose a fixed-rate loan in 2025, while 97.5% of in-school borrowers preferred fixed rates.
“It was higher than I expected when I reached out to our data team,” says Kaydee Ambas, a certified financial education instructor at Earnest.
Private lender Abe reports similarly low numbers of borrowers in the variable camp. “Less than 5% of Abe borrowers select a variable rate,” says Steve Winnie, chief operating officer of Monogram LLC, the company that created and administers Abe.
Ken Ruggiero, founder and CEO of , says less than 10% of Ascent’s customers settle on variable rates.
The largest private lenders report slightly higher numbers of variable-rate borrowers, although fixed rates still prevail there by a large margin.
About one in five student loan borrowers choose variable-rate loans, and that figure has remained relatively consistent over the past several years, says Katarina Ellison, a Sallie Mae spokesperson. (Ellison also notes that more than half of Sallie Mae borrowers opt to begin repayment while they’re still in school, which often qualifies them for a lower rate.)
“The conclusion that many borrowers are making today is that fixed makes more sense to them,” says Dan Kennedy, chief marketing officer at private lender , where fixed-rate loans also represent a significant majority of student loans. “That tends to be what we see, and I think that’s broadly true across the industry.”
It’s not surprising that college borrowers prefer fixed-rate loans. Fixed rates tend to be significantly more popular in other lending areas as well. For example, roughly 92% of U.S. households with mortgages have fixed-rate home loans.
Ambas says the reluctance to choose variable rates is likely due at least in part to the volatile interest rate swings that have taken place since the onset of the pandemic.
“Borrowers have lived through a rate environment where the Fed moves fast, moves hard, and they’ve decided that predictability is worth paying a small premium for,” says Ambas.
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What to Consider When Choosing Between Variable and Fixed Student Loan Rates
Fixed and variable rates each have their advantages. Here are some factors to weigh when comparing the two.
Estimate How Quickly You Can Repay
Variable-rate student loans often come with a lower introductory rate that can be enticing for borrowers. And if you anticipate that general interest rates will remain the same or go lower in the future, a variable rate could save you money. But that means that variable rates may be a better fit if you expect to pay off your loan in a shorter time frame.
“Variable rates are a bet that rates will stay flat or fall during your repayment window,” says Ambas. “If you’re trying to pay off your loan within three years and you have the income flexibility, it could be a reasonable bet. But if you’re looking at a longer timeline, like a 10-year repayment horizon, then you’re betting on a decade of rate stability, and that’s a harder bet to make.”
Check That the Variable Rate Is Capped
Most lenders cap their variable rates, ensuring that a borrower’s payments don’t skyrocket if the market shifts abruptly. Make sure to read the fine print to confirm that your loan has a ceiling, and if so, what that is. Caps on longer-term loans are typically higher than those on shorter timespans.
Calculate what your payments would look like if your rate climbed to that upper limit, and determine whether you’d be able to afford those payments.
“The biggest risk is that the rate can go up and that could impact your budget severely,” says Ambas.
Understand Your Comfort Level with Uncertainty
After crunching the numbers on how market conditions could impact your payments with a variable rate, you’ll have to ask yourself whether you can stomach the ups and downs.
“It is completely a function of your circumstances and really your risk tolerance,” says Kennedy.
Ellison suggests taking your time to research and fully understand the terms of the loan and how it fits with your financial situation.
“Ultimately, it’s a personal or family decision, but we always encourage families to explore their options and think about what best aligns with their financial needs, repayment preferences and overall market outlook,” says Ellison.
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