House halves interest rates
To save money on school and spend it in other ways is ideal for students.
The U.S. House of Representatives passed a bill Jan. 17 to cut the student federal subsidized loan rates from 6.8 percent to 3.4.
If the Senate and President both pass the bill, students will begin to benefit from the bill this year.
According to the House of Representative’s Web site, if the bill passes, a person who takes out a loan between July 1, 2007 and July 1, 2008 will have an interest rate of 6.12 percent.
The interest rate will continue to drop each year on a graduated scale year until it reaches 3.4 percent in 2011.
Sandra Salstrom, press secretary for Congressman Earl Pomeroy, said if the bill passes, the average student in 2007 who takes out a loan will save $2,130.
“Also beginning in 2011, students will save $4,120 on the life of the loan,” Salstrom said.
According to the United States Public Interest Research Group, the average amount of subsidized Stafford Loan debt for a 4-year graduate in North Dakota is $12,890.
“The increasing demand for a highly-skilled, well-educated workforce in today’s global economy makes it critical that students in North Dakota can afford a college education,” Pomeroy said in a press release. “Reducing the interest rate on student loans will help students in North Dakota remain competitive in the global marketplace.”
Students generally think positively about the bill even if they don’t have loans.
“I think it is a good thing because you won’t have as many bills when you get out of college,” said Chad Biegler, a freshman majoring in mechanical engineering. “You won’t have to deal with the debt and pressure straight out of college.” Biegler said he doesn’t have any loans right now but will in the future.
For students who do have loans, the news is a relief.
“I think it is really good for us. I like paying less,” Brian Glueckert, a junior majoring in architecture, said. “I wonder though what it is doing for banks. There are always two sides of an issue, but it is good for me. My interest rates are pretty high.”
The bill was proposed to save students money in the long run, Salstrom said.