Student loan interest rates drop today
By By Georgia E. Frye / staff writer
July 1, 2003
Parents and students could find it easier to finance undergraduate and graduate higher education when interest rates on two loan programs drop to all-time lows beginning today.
Interest rates for Federal Stafford loans issued July 1, 1998, through June 30, 2004, will be 3.42 percent during the repayment period or 2.82 percent for students in school or in a deferment period.
Interest rates for the loans had been 4.06 percent during repayment and 3.46 percent this year for students in school or in a deferment period.
A second program, the Parent Loans for Undergraduate Students or PLUS loan, will drop to 4.22 percent for money borrowed after July 1, 1998 down from 4.86 percent.
The PLUS loan allows parents to borrow up to the full cost of college tuition, room and board that is not covered by the student's financial aid.
Interest rates on Federal Stafford and PLUS loans change year-to-year and can't be locked in. The loan interest rates are reset annually July 1 tied to the auction to U.S. Treasury bills.
Welden said a preferred lender list, which is available at the financial aid office at MCC, may be of help to students because not all lenders are the same. Some lenders could offer students and parents discounted Stafford and PLUS loans.
Welden suggests students already with loans contact their lender to see if other reductions are available. She said students can find out who their lender is by visiting www.nslc.org.
Welden also said students could save money by consolidating loans.
Deena Moore, a spokesman for Education Services Foundation, said students who have loans with her company receive benefits like a 2 percent discount if payments are drafted from their banking account.
Moore said many lenders offer incentives. She also said there may be a way to lock in the low interest rate with consolidation of student loans.