Interest rates are going down for student loans. Two point-two percent, is a big cut in the rate of federally backed student loans. For students just taking out loans, the rate will be five-point-99 percent, and parents taking out “PLUS” loans will repay at a rate of 6.79 percent. The rate on federally backed student loans will be the lowest rate since the program began nearly three decades ago. Earl Dowling is director of student financial aid at Iowa State University. He says for a new student, this will mean about 30 dollars a month less in their student-loan repayments. Dowling says students who’ve already taken out loans are stuck for now with the eight-point-one-nine percent rate they financed at.When they graduate, those students will be offered the chance to consolidate all their loans. If they do that, they can then take advantage of the lower rate. The decrease is two-point-two percent, which will mean over the life of a loan taken out for 16-thousand dollars, the student could find repayments cut by as much as two thousand dollars.
Iowa's Radio News Network
