Loan Changes Will Help Students Finish College, ECC Expert Says

A bill that passed the U.S. House with bipartisan support last week and is awaiting President Barack Obama’s signature will cut the interest rate on federal student loans, a move that was welcome by Elgin Community College’s director of financial aid and scholarships, The Courier-News in Elgin reports.

Loans often are the only option students have to get a college education. But in today’s economy, many then struggle with payments, often defaulting on their loans, according to The Courier-News story, written by Emily McFarlan.

The lower interest rate means lower payments and a decreased burden to students, ECC’s Amy Perrin told The Courier-News. “Lower payments equals less defaults,” she said.

The new law would link student loan interest rates to the financial markets, meaning most students today would receive lower rates. Rates for subsequent loans, however, would rise as the economy improves, which most expect will occur.

According to The Courier-News story, rates this fall for both subsidized and nonsubsiduzed loans would be 3.9 percent for undergraduate students, 5.4 percent for graduate students, and 6.4 percent for parents.

Rates aren’t expected to reach the limits set by Congress in the next 10 years.

• More details on the new federal student legislation can be found in The Courier-News.

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