Students can save more than $1,000 now that interest rates on federal student loans hit an all-time low.
The U.S. Department of Education announced rate decreases for both student and parent loans Thursday. Effective July 1, the interest rate for Stafford Loans will fall from 5.99 percent to 4.06 and the PLUS Loans rate for parents will drop to 4.86 percent from 5.79.
The loan rates are the lowest since the program’s implementation in 1965.
With a 10 year repayment plan and $10,000 in debt, the dropped interest rate could save students an estimated $1,133.
“It’s always good news for students to make school more affordable,” MSU Office of Financial Aid Director Richard Shipman said.
“It’s good news for the country that we are able to do this sort of thing.”
The office reports the average MSU senior will be nearly $18,000 in debt. Students who pursue graduate careers expound on that figure by accumulating more than $28,000 worth of loans collected.
Criminal justice junior Melinda Carlson said she could definitely see a benefit for students that would come with the lower rate.
“You have enough to worry about in college without having to worry about the interest on your loans,” she said.
The rate decrease is part of the Bush administration’s attempt to make higher education affordable, U.S. Education Secretary Rod Paige said in a press release.
“Access to quality education can mean a better, brighter future for students from all backgrounds, and is essential to a competitive workforce,” Paige said.
The interest rate on federal student loans can be adjusted every year,
