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College student loan rates are going down

Updated:
The sluggish economy might make it harder for new college graduates to find jobs. But for those who have student loans, there's an upside. They're looking at the lowest interest rates in history. News on Six anchor Terry Hood takes a look.

Attending college isn't cheap. And to get that degree most students go into big debt. Laura Robbins: "I have about $22,000 dollars worth of loans." Nicole McMahan: "I have $25,000." Troy Stoutermire: "That day when you're getting ready to graduate and you do not look forward to biting off that huge bill."

Starting July 1st, Uncle Sam is making that bite easier to swallow. Interest rates for current students with Stafford loans will drop to just under 3.5%. Rates for graduates paying off loans will fall to a little over 4%. And parents using Plus loans to pay for their children's education will see their rates cut to just under 5% percent. TU financial aid director, Vicki Hendrickson, "It's the first time in the history of student loans that its gone this low. It’s a neat neat option for our students and our parents that are considering taking out student loans. Its wonderful."

Ron Hancock with Bank of Oklahoma: "On a $10,000 debt if we looked at a standard 10-year repayment term which is the basic standard repayment it would save them around $1,100 over that ten-year span." Students saddled with loans can thank a sluggish economy for the break. But the gains are short-term.

Vicki Hendrickson: "As of July first of 2003 the interest rates will be determined again, but for this year it’s an incredible opportunity." The only way for graduates to lock into this low rate for longer than a year is to consolidate their loans. Ron Hancock: "Obviously its a great time to be thinking about it. Students that just graduated from college or students that are in repayment can actually take advantage of the lower interest rates now by locking in at a fixed interest rate through a consolidation loan."

Consolidation does have its drawbacks. For starters it could extend the life of a student loan for a number of years.

To find out more about these new rates and how they could affect you, call Educational Services at 1-800-788-1881.
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