Interest rates can increase the total cost of your student loan. When you apply for a loan, you’ll be given an interest rate, which is the rate charged to borrow money. When you borrow money, you pay it back with interest, so you end up paying back more than you borrowed. Interest starts to accrue (grow) the day your student loan funds are disbursed (sent to your school). There are two types of interest rates—variable and fixed. A variable interest rate may go up or down due to an increase or decrease to the loan's index, so your monthly student loan payments may vary over time. A fixed interest rate stays the same for the life of the loan. This means you’ll have predictable monthly student loan payments