Student loan rates lowest in decades

College grads to save $700 in payments, U.S. senator says

By Suzanne Johnson, On-Line Forty-Niner

Thursday, October 8, 1998

The U.S. Senate has passed a bill that will significantly lower interest rates for students taking out federal loans as reported in a New York Times article published in The Press Telegram.

In addition to low-interest rates, low-income students are in a position to receive thousands of additional dollars in grants, the article said.

The interest rate, approximately three-fourths of a percentage point below last year's rate, is the lowest in decades.

This reflects the general decline in interest rates throughout the economy as well as changes in how the rates are established, according to the article.

Students throughout the country will benefit from the new rate.

In the article Sen. Edward M. Kennedy, D-Mass., said he estimates a student graduating from college with a $13,000 debt would save $700 in interest payments.

A student with a $20,000 loan would save approximately $1000 over a five-year pay back, according to the article.

Students can consolidate their existing loans at the new rate until Jan. 31.

The bill, passed unanimously by both the House and the Senate, won final approval Tuesday and is expected to become law, said the article.