Mario Cazombo

The Department of Education is now accepting requests for early access to the Free Application for Federal Student Aid, or FAFSA. The Education Department expanded beta testing for the 2026-2027 FAFSA by opening it up to more applicants this week. The initial phase of the beta test was closed, available only to a small group of testers. Now, all students and families can apply on the Federal Student Aid website for early access during the expanded testing period. The FAFSA is typically released on Oct. 1 each year and runs through Jun. 30 of the following year. Nearly 20 million current and incoming college students fill out the FAFSA annually. Financial aid experts encourage all students regardless of family income to fill out the form each year, even if they don’t require need-based aid. That’s because the application is also used to determine state aid, institutional aid, work-study awards, federal student loans and sometimes merit scholarships. Getting early access to the FAFSA could help families knock out a dreaded chore on a long college checklist sooner, but the beta version of the upcoming form may include additional kinks applicants should be aware of. “It’s important to keep in mind that not all beta applicants will be selected for participation,” says Stacy MacPhetres, senior director of education finance at College Coach, an admissions consulting firm. “For those who do participate, they may experience some bugs or glitches in the process.” Here’s what else to know about the beta test and the new FAFSA form. What’s new with the upcoming FAFSA? The latest version of the FAFSA is continuing a years-long process of making the form easier for families to fill out. MacPhetres says that some updates include tweaks to make the form clearer and more accessible as well as a streamlined identity verification process when students create a studentaid.gov account, which is required to fill out the FAFSA and opt in to the beta test. According to Sarah Austin, a policy analyst at the nonprofit National Association of Student Financial Aid Administrators, it’s about to get much easier for dependent students to invite parents or guardians to fill out their portion of the FAFSA. She says students will no longer need their parents’ Social Security numbers or dates of birth to grant them access to the form. All students will need is an email address to send them an invitation to fill out the form, and then the family members can input all required information themselves. “The contributor invitation process was a major concern, so we are excited to see how this improvement helps with FAFSA completions,” Austin says. On the policy side, MacPhetres highlights two changes from President Donald Trump’s recent Big Beautiful Bill Act that affect federal aid eligibility: Assets for family farms and small businesses are now excluded from FAFSA reporting, she says. And foreign income is now automatically included in earnings calculations for the Pell Grant. Streamlining the FAFSA has been an ongoing effort for the Education Department. The FAFSA Simplification Act, signed into law at the end of President Donald Trump’s first term, mandated a simpler and shorter form. The rollout of the simplified form during the past two academic cycles under the Biden administration was marred with delays, glitches and errors. With this year’s form, financial aid experts are hopeful those issues will be relegated to the past. “We don’t have any reason to believe we’ll run into the same kinds of issues we saw with the initial rollout of the streamlined FAFSA,” Austin says. “It’s promising that we are already in phase two of beta testing by mid-August, and we remain optimistic that this trend will continue.” Should you fill out the FAFSA during the beta test? MacPhetres always encourages families to fill out the FAFSA as early as possible to be sure they meet all priority deadlines set by colleges and because some state- and college-level aid is awarded on a first-come, first-served basis. But filling it out this early has unique pros and cons. As for the perks, starting the FAFSA sooner can provide families more time to deal with any potential issues that arise while applying for aid. Austin notes that contacting the Federal Student Aid office will likely be much easier during the beta test, too, given the limited number of applicants. “FAFSAs completed during beta testing are real FAFSAs,” Austin says. “While institutions are not required to act on this data immediately, it is possible that completing the FAFSA during the beta period will speed up the financial aid awarding process later” for college- or state-level aid. She adds that for federal aid from the Education Department, officials have made it clear that beta testers won’t get any funding advantages. On the other hand, glitches are far more likely during the beta testing phase. The entire purpose of the phased rollout it is to find the major issues and iron them out before releasing the official FAFSA this fall. Another issue that MacPhetres mentions is that beta testers may need to resubmit certain information if any major changes are implemented to the final version of the FAFSA. During a FAFSA beta test last year, Shannon Vasconcelos — a colleague of MacPhetres’s at College Coach — previously told Money that there’s no real rush to fill out the FAFSA during testing periods. “I would let the department work out the kinks in the form before I was anxious to hop on there,” she said. “Colleges are not going to set any financial aid deadlines so early that you couldn’t complete it on the normal timeline.” More from Money: The Best Colleges in America Right Now How to Pick a College Major in the Age of AI Survey Shows High Schoolers Vastly Underestimate Their Future Student Loan Needs

As fall tuition deadlines approach, families are making last-minute decisions on how to cover college costs — and for many, that means turning to private student loans. If you’re borrowing for the upcoming school year, it’s important to outline your expenses and compare lenders carefully. To help you make smart borrowing decisions, here’s Money’s guide to everything you need to know about student loan interest rates right now. Latest student loan interest rates Fixed rates Variable rates Private student loans 2.85% – 17.99% 4.13% – 17.99% Federal student loans 6.39% – 8.94% N/A Federal vs. private student loans Before you borrow for college, it’s important to understand how federal and private student loans differ. Federal student loans have fixed rates set annually by the government and everyone who borrows gets the same rate (based on the type of loan they’re taking out). Private student loan rates vary by lender and a borrower’s financial profile. In the sections below, you’ll find a breakdown of how each type of loan works — and a more in-depth snapshot of where rates stand today. Everything you need to know about student loan interest Whether you’re taking out your first loan to pay your tuition bill for the upcoming fall semester or you recently graduated and are getting ready to start repaying, understanding how interest accrues on your loans can help you avoid unpleasant surprises. Table of contents: Federal student loan interest rates Private student loans interest rates How to get a lower student loan interest rate Student loan interest and taxes Interest rates: student loans vs. other types of debt Federal student loan interest rates When students need to borrow money to pay for college, experts recommend starting with federal student loans since they typically have lower rates and better repayment options than private student loans. Your interest rate depends on the type of loan you qualify for and the year you took out the loan. Current interest rates on federal student loans On May 30, the Education Department’s Federal Student Aid office announced the new federal student loan interest rates for the 2025-2026 school year. The following rates apply to all loans disbursed between July 1, 2025 and June 30, 2026. Loan Name Borrower Type Interest Rates for 2025-2026 Interest Rates for 2024-2025 Direct Subsidized Undergraduate students 6.39% 6.54% Direct Unsubsidized Undergraduate students 6.39% 6.54% Direct Unsubsidized Graduate students 7.94% 8.08% PLUS Loan Graduate students and parents of undergraduate students 8.94% 9.08% How do interest rates work on federal student loans With federal student loans, the rates are fixed, meaning they stay the same for the duration of your repayment term. The process for setting rates was established by Congress: the rates are based on the high yield of the 10-year Treasury Notes at auction each May, so the rate can change every year for new borrowers. If you have federal subsidized loans, the government will cover the interest that accrues while you’re in college, during the six months after you graduate or leave school and during any periods of deferment. But with unsubsidized and PLUS loans, you are responsible for all the interest charges, even while you’re in school. Interest on unsubsidized federal loans is capitalized — or added to the loan principal — when your grace period ends, so it’s common to see your balance grow unless you make large enough payments that cover the accrued interest. Interest capitalization is costly because after the capitalized amount is added to your principal, interest then continues to be charged on the new, larger balance. Private student loan interest rates Private student loans can come from banks, credit unions and other financial institutions. Lenders can set their own rates, but they usually base them on a measure like the Secured Overnight Refinancing Rate (SOFR) — a benchmark that influences the rates at which banks lend to one another. Lenders will charge the SOFR rate plus a margin rate, such as 1%. As the SOFR rate changes, the lender will change its rates too. Current rates on private student loans Private student loan rates vary by lender, borrower credit profile and loan terms. These loans can have fixed or variable rates; fixed rates never change, while variable rates can fluctuate over time, depending on market conditions. Currently, fixed rates for private student loans start around 3.24%. Below are the latest private student loan interest rates from top lenders: Lender Fixed Interest Rates* Variable Interest Rates* Abe 2.85% to 15.61% 4.13% – 16.54% Ascent 2.89% – 15.61% 4.34% – 15.25% Citizens Bank 3.24% – 14.98% 4.99% – 15.46% College Ave 2.89% – 17.99% 4.24% – 17.99% Custom Choice 3.24% – 15.71% 4.19% – 16.39% Earnest 2.89% -16.74% 4.99% – 17.10% ELFI 2.99% – 14.22% 5.00% – 13.97% Massachusetts Educational Financing Authority (MEFA) 3.29% – 8.89% N/A Sallie Mae 2.89% – 17.49% 4.37% – 16.99% SoFi 3.18% – 15.99% 4.39% – 15.99% Rhode Island Student Loan Authority (RISLA) 2.99% – 8.39% N/A *Rates current as of Aug. 20, 2025. Lowest rates reflect discount for setting up autopay. How do interest rates work on private student loans? Private loan interest rates can vary significantly between lenders, and your rate is influenced by your credit history, income, desired loan term and the program you are enrolled in for the upcoming semester. With private student loans, payments are usually required while you’re in school, though you may be able to pay a reduced amount. Interest starts accruing immediately after loan disbursement. Private lenders will capitalize the interest at different points, but how capitalization is handled varies by lender. Keep in mind: Private loans can be a riskier form of debt than federal loans since they usually have higher rates and fewer repayment options. Exhaust your other financial aid options before turning to private loans. Current rates for student loan refinance When you refinance a student loan, you replace your existing student loan (whether it’s a federal loan or a private loan) with a new private loan. Therefore, interest rates

As the stock market continues to set record highs, an increasing number of investors are concerned with skyrocketing valuations. But are stocks too expensive today? And if so, is the market in a bubble that’s due to pop? The answers depend on who you ask. The broad-based S&P 500 has climbed by roughly 15% in the past year alone, and the index’s total value has more than doubled from its pre-pandemic norms. (Exactly six years ago, the S&P 500 closed at 2,926.46. Yesterday, it closed at 6,411.53.) The index’s price-to-earnings (P/E) ratio — a metric that represents investors’ expectations for a company’s future growth, and how much of a premium they’re willing to pay for every dollar a company earns — is a historically high 29.85, compared to a median of 17.97. All of this would suggest an overabundance of optimism on the part of investors. A recent Bank of America survey found that a record-high 91% of respondents think stocks today are overvalued, the highest figure since the bank began the survey in 2001. According to Vanguard, U.S. stocks today are overvalued by nearly 50%. Investors are enthusiastic despite lofty valuations There is evidence that the market’s current buoyancy owes a great deal to retail investors’ zeal. Call it the FOMO effect: As valuations rise, more people want in — especially retail investors. Data from Gallup shows that the number of Americans who own stock has jumped by 10 percentage points over the past decade. “What I see in the stock market is rising demand for stocks. People want to get in, people want to stay in,” says Michael Kahn, senior vice president and senior market analyst at the Lowry Research division of CFRA Research. “The desire to sell has been diminished.” Those investors might share the same sentiment as numerous market pros, who say there are other signals that suggest most — if not all — of the current market growth is grounded in fundamentals rather than fantasy. “Valuations are certainly elevated. The question is, should they be?” says Mike Dickson, head of research at Horizon Investments. “We just came off of earnings season and, given what we’ve just seen, valuations seem appropriate.” AI is the ‘tip of the spear’ driving market growth There’s one reason why investing pros remain optimistic about future earnings: AI. “AI is the tip of the spear as it relates to technology in this day and age,” Dickson says. Big tech companies are pouring money into AI investments as they chase the promise of huge gains in productivity and, ultimately, earnings. If they succeed, rather than being overvalued, Dickson says that it’s very possible the market is underpricing the productivity possibilities with AI. Comparisons to the frothy, tech-fueled investor enthusiasm in the late 1990s that immediately preceded dot-com crash of 2000 are perhaps inevitable, but there are some key differences that should assuage investors’ worries. “The companies leading the top of the market today are extremely high-quality, massive market firms,” Dickson says. “When you look back to the ’90s … it was more speculative.” That said, while many experts are similarly upbeat about the technology’s potential, they acknowledge that there are a lot of forward-looking assumptions baked into current valuations that might not pan out like investors are hoping. What and where are the risks? This is all a game of expectations, according to Jeff Buchbinder, chief equity strategist at LPL Financial. “Right now, valuations reflect a lot of optimism about profit growth in the coming years,” he says. “They’re probably also reflecting anticipated future Fed rate cuts and a lower 10-year [Treasury note] yield.” If inflation — and interest rates — remain elevated, those expectations could be harder to achieve. In addition, there’s one big caveat with all of the AI enthusiasm: In many cases, performance hasn’t (yet) lived up to the hype. “The promise of a lot of the productivity gains from AI have largely not found their way into the economy yet, so that becomes a 2026 story,” says Eric Teal, chief investment officer for Comerica Wealth Management. “We have to see the productivity gains, the sales growth. A lot of the promise that AI promotes needs to bear fruit.” If this promise isn’t kept, high-flying tech stocks — and the indices affected by their enormous weightings — could be at risk. “If AI gains do not bear themselves out and trickle down, then the degree of concentration in the market is excessively high, which would be concerning for a market correction,” Teal cautions. Teal and others raise concerns about concentration risk. The top 10 stocks in the S&P currently contribute nearly 40% of the overall market’s value. “[This] is very concerning from a diversification standpoint,” he says. In particular, the so-called Magnificent Seven stocks are where the most extreme growth — and the highest investor expectations — are centered. Calculating the P/E ratio for these seven companies using estimated earnings for the coming year as the denominator gets you a figure of roughly 30, Buchbinder says. For the other 493 companies in the S&P, that collective P/E ratio is 20. “It’s simple numbers,” he says, pointing out that under current market conditions, even a stumble from any of those firms would be a seismic event. While excessive concentration is a concern, it’s not the only potential stumbling block for the market. Worry about the persistence of inflation — and the higher borrowing costs associated with it — as well as the impact of tariffs on companies’ costs and profits have the potential to chill investor enthusiasm. “Tariffs, in particular, remain a wild card that could leave investors playing a much weaker hand than anticipated,” Buchbinder says. “The stock market is pricing in near-clarity [with tariffs], and we probably need a little bit of a nod to the fog that still needs to clear … because the inflationary effects are just starting to be felt.” More from Money: You Can Thank Everyday Investors for the Continued Bull Market Even