A variable interest rate is an ongoing fee that student lenders (private and Federal) charge for money that they lend to students and parents until the amount borrowed (the principal) is repaid. The fee is called interest. Some student loans are issued with a fixed interest rate that remains the same during the in-school period and the repayment period. Other student loans, primarily private student loans, offer a variable rate that changes based on the general economic market conditions. A variable rate student loan is usually tied to a market rate such as the Prime Rate, LIBOR or the 10-Year Treasury Note. Variable interest rate loans can be beneficial to borrowers in the short term when the economy is stable because they are generally cheaper than fixed rates. However, borrowers should keep in mind that the interest rate often resets quarterly (every three months) over the entire in-school and repayment period, which can extend ten or even fifteen years.