Student Loan Interest Rates to Fall to All-Time Lows

Interest rates on federally guaranteed student loans will drop to historic lows again this summer, potentially saving both new and current education loan borrowers thousands of dollars in interest over the life of their loans. These record-low rates will help families and students finance college this fall. "College financing has never been more affordable," said Tom Joyce, Vice President of Corporate Communications for Sallie Mae. "These new rates on federal education loans trump what consumers will find anywhere else."

Federal Stafford Loans issued on or after July 1, 1998 automatically will be reset to an interest rate of 2.77 percent during in-school, grace and deferment periods, and 3.37 percent during repayment. Interest rates on Federal Parent Loans for Undergraduate Students (PLUS) issued on or after July 1, 1998 will drop to a record low of 4.17 percent. These rates, which have fallen nearly five percentage points over the past four years, are in effect from July 1, 2004 through June 30, 2005.

Interest rates on Federal Stafford and PLUS Loans are variable and reset annually on July 1 based on the 91-day Treasury bill yield from the last auction in May, plus a margin of interest set by federal regulation. The U.S. Department of Education is expected to confirm the new rates – calculated based on yesterday's auction -- later this week. For loans issued after July 1, 1998, Stafford Loans are capped at 8.25 percent and PLUS Loans may not exceed 9.00 percent.

You may like these other stories...

Ernst & Young fiscal-year revenue rises 6% to $27.4 billionMichael Rapoport of the Wall Street Journal reported late Thursday that Ernst & Young's (EY) global revenue was $27.4 billion in its latest fiscal year,...
TIGTA recommends improvements to selection of problematic paid preparers for further enforcement actionsThe IRS could improve its selection of problematic paid tax return preparers for further enforcement actions, according...
AICPA expresses concerns to IRS about electronic signature standards for “remote transactions”In a Sept. 24 letter to the IRS, the American Institute of CPAs (AICPA) expressed concern that current electronic...

Already a member? log in here.

Upcoming CPE Webinars

Sep 30This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 9In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards.
Oct 15This webinar presents the requirements of AU-C 600, Audits of Group Financial Statements (Including the Work of Component Auditors).
Oct 21Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience’s communication style.