By Ann Carrns

New York Times News Service

Interest rates in general are rising, and so are the rates on student loans for the coming school year.

Interest rates on federal student loans for undergraduates are expected to increase to 5.045 percent from 4.45 percent for the 2018-19 academic year, said Mark Kantrowitz, an author and expert on student financial aid.

Rates on loans for graduate students, Kantrowitz said, are expected to go up to 6.595 percent from 6 percent; and rates on PLUS loans, for parents and graduate students, to 7.595 percent from 7 percent.

The federal government sets rates for new student loans each year, under a formula adopted by Congress several years ago. The new rates take effect annually on July 1, and apply to loans taken out for the following academic year. Rates can fall or remain flat; this will be the second consecutive year they have risen.

The Education Department has not officially announced the new rates, but Kantrowitz has done the math, and he reported the changes in a blog post on (Rates are based on the 10-year Treasury note at the May auction, plus an additional fixed rate depending on the type of loan.)

Kantrowitz noted that the new rates would increase monthly payments by about 2.8 percent, or “a few dollars a month” for most borrowers, assuming a standard 10-year repayment term.

Still, with student debt an increasing concern, higher rates mean families should weigh carefully how much they want to rely on borrowing to pay for college. A stronger economy makes it more likely that graduates will be able to find jobs and meet their loan obligations, but it is still best to be cautious, said Diane Cheng, associate research director at the nonprofit Institute for College Access & Success.

“One way to help manage the debt burden,” she said, was to be conservative with loans in the first place.

Student loan debt in the United States rose to $1.38 trillion at the end of 2017, up $68 billion from the year before, according to the Federal Reserve Bank of New York. Serious delinquencies declined slightly in the fourth quarter from the prior three months, the report said, but “remain at a high level.”

When calculating how to finance a college education, parents tend to overestimate how much they will contribute from their savings and underestimate how their children will need to borrow, according to a new study of parents with children under 18 from Sallie Mae, a private lender of student loans.

For instance, parents predicted on average that 13 percent of college costs would be paid with student loans.

But the Sallie Mae study, which was published this week, found that the actual share of costs covered by loans in the 2016-17 school year was 19 percent

Parents also predicted on average that their savings would cover 29 percent of college costs, compared with an actual share of 10 percent, the study found.

Here are some questions and answers about student loans:

Q: Do the higher rates apply to existing student loans?

A: No. The rates apply to federal loans taken out after June 30; they do not affect loans that students have already received, Kantrowitz said.

Q: Do I have to take out all of the loans I am authorized to borrow?

A: No, Cheng said. You can always borrow less than the full amount authorized in your financial aid package. If your circumstances change during the school year, you can contact your college’s financial aid office about borrowing more, she said, up to the limits set by the government.

Q: Do the higher rates apply to private student loans, too?

A: No, the rates apply only to loans made by the federal government, and are fixed for the life of the loan. Rates on private loans, such as those from banks or other lenders, are set by the lender and may vary over the life of the loan. But even if rates on a private loan are lower at the start, Cheng said, federal loans are a better bet because they come with guaranteed consumer protections, like an option to have monthly payments based on your income.

“Federal loans should be your first choice,” she said.