Student loan legislation will help ND students, families
Posted on 8/1/2013
For More Information Contact: Linda Donlin, Director of Communications and Media Relations North Dakota University System Phone: 701.328.2962 E-mail: firstname.lastname@example.org
A bipartisan bill that would lower the cost of borrowing for students across the country was passed yesterday in Washington, D.C. That's good news for students of the North Dakota University System, who already have access to quality education at an affordable price.
"We are pleased that Congress was able to collaborate effectively to reach a solution," says Larry C. Skogen, acting chancellor for NDUS. "This is significant legislation that brings a long-term benefit for our students. While we can't control what happens on the national front, we applaud the efforts of legislators to support access to higher education. That's a tenet that is part of the foundation of North Dakota's higher education system."
The new legislation means that undergraduates this fall would borrow at a 3.9 percent interest rate for subsidized and unsubsidized Stafford loans. Had an agreement not been reached, the rate would have doubled to 6.8 percent for the 2013-14 year. An incoming NDUS freshman, who could borrow $4,500 in student loans, will save about $882 in interest under a standard 10-year repayment plan.
"This helps give families clear direction in planning for their student's college education financing," says Brenda Zastoupil, NDUS director of financial aid. "It removes the uncertainty that we've faced in previous years concerning interest rates, and it also places a cap on rates, which provides a sense of security." The student loan interest rate deal marks a long-awaited compromise by Senate Republicans, Democrats, and the Obama Administration. Under the act interest rates will be based on the 10-year Treasury bill plus the following percentage add-ons:
• 2.05 percent for undergraduate Stafford (subsidized and unsubsidized); • 3.6 percent for graduate Stafford; and • 4.6 percent for PLUS (parents and graduate students).
The deal includes caps: 8.25 percent for undergraduate Stafford; 9.5 percent for graduate Stafford; and 10.5 percent for PLUS. Loans would be "variable-fixed," meaning students would receive a new rate with each new loan, but then that rate would be fixed for the life of the loan.
In 2011-12, undergraduate and graduate students in North Dakota borrowed an average of $4,467, compared to the national average of $4,760. "This helps make an education in North Dakota even more affordable and accessible," says Skogen. "It is our hope that Congress will continue to work together effectively on the other important issues facing higher education."