by Lisa J. Tabet
Daily Lobo
Attaining a college education may soon become more affordable than ever, with federal student loan interest rates expected to drop dramatically beginning July 1, according to U.S. Rep. Tom Udall, D-NM.
"Borrowing to pay for college should be the investment of a lifetime," Udall said in a news release. "Yet far too many students are mortgaging their future at too high a cost."
According to Udall's office, federal loan interest rates are currently at 4.06 percent and are expected to drop to about 3.5 percent within several weeks.
This should bring a sigh of relief to the more than 15,000 - or about 64 percent - of UNM's student population who received some form of financial assistance during the 2002-03 academic year, according to UNM's Bursar's Office.
"Student loan debt has almost doubled over the past eight years, and two-fifths of all student borrowers graduate with unmanageable debt levels," Udall said.
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The interest rates for federal student loans are reset each year on July 1 and are based on a number of factors including the last auction of the U.S. government's treasury bill and a margin of interest set by federal regulation.
This year's rates will reach unprecedented lows, based upon the expected outcome of these factors and current trends in the economy.
According to UNM's Financial Aid Office, the University distributed $124.5 million to students at its main and branch campuses, with the bulk of that money, 68 percent, coming from federal assistance programs such as the various loans available to college students.
Ben Bonin, a junior at UNM said the change in interest rates will affect him.
"I've taken out a significant amount already, so it will be nice as far as the interest goes, although who knows how long it will last," Bonin said.
According to the news release from Udall's office, college students who are considering taking out a federal loan can secure the new rate, which will save the average student-borrower $3,200 by consolidating after July 1, 2003 and before June 30, 2004.
Consolidation involves paying off the borrower's current federal education loans in full and creating a new loan with a fixed interest rate. It can also result in fewer lender relations, loan payments based on a percentage of income and an extension of the payment period.
