Students who receive federal student loans to attend Texas A&M International University have reason to celebrate this week.
Action by the Federal Reserve will slash interest rates on student loans. The variable interest rate on student loans has been lowered by 2.2% to the lowest mark in recent years. Rates while in-school will be 5.39% and while in repayment 5.99%. The change is effective July 1, 2001 and will remain in place for the upcoming year.
Araceli Rangel, director of Financial Aid at A&M International, said the news is especially important for students who will realize savings when they pay back their students loans.
"For students receiving subsidized student loans, the federal government pays the interest while the student is in school, in deferment and for six months after graduation. For students with unsubsidized federal student loans, students are responsible for paying the interest while in school, in deferment, and during the grace period. The reduction of the interest rate will translate to savings for students as they begin pay back, " she said.
Rangel also recommended that student loan borrowers with multiple loans consolidate them.
"We would encourage borrowers with multiple loans to consolidate them into single loans after July 1 to lock in the lower rate for the duration of the loan. In most instances, refinancing would save a borrower on a standard 10-year repayment plan about $136 in interest for every $1,000 of outstanding loans. For refinancing to occur, a borrower must be in repayment in order to qualify," she said.
She noted that students ready to graduate should also lock in at the new, lower interest rate.
She said the reduced interest rates should also be an additional incentive for students who considering attending the University and planning on receiving Federal student aid .
"Over 65 percent of our students receive Federal assistance to make their dreams of a higher education a reality. This reduction in interest rates should be an additional incentive to them to pursue their dreams," she said.
"We encourage all students to call or visit our offices and look into financial aid programs that are available for all students," she concluded.
For additional information, please contact Rangel in the Office of Financial Aid at 326. 2225 or visit offices in the Dr. F. M. Canseco Hall, room 302.
Office hours are Monday, Tuesday and Friday from 8 a.m. - 5 p.m. And Wednesday and Thursday from 8 a.m - 7 p.m.
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