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Press Releases
Interest rates for federal student loans will be at a historic low for
the upcoming academic year, according to Eric Hardmeyer, President of Bank
of North Dakota (BND) in Bismarck. Beginning July 1, federal student loan
interest rates will drop to the lowest rate in decades resulting in significant
savings for borrowers.
Most students with variable rate Stafford loans through Student Loans of
North Dakota (SLND), a division of Bank of North Dakota, will have an interest
rate of 3.46% while in school, deferment, or grace, dropping nearly two
percent from last year's rate of 5.39%. Borrowers that have already entered
repayment will enjoy a rate of 4.06%, compared to the former rate of 5.99%.
The Parent Loan for Undergraduate Students (PLUS) loan interest rate will
drop from 6.79% to a record low of 4.86%.
Stafford and PLUS loan interest rates are adjusted annually according to
a formula based on the 91-day Treasury bill rates. The new rates are in
effect from July 1, 2002 to June 30, 2003. "The lower federal loan
rates can allow student and parent borrowers to potentially save money
on interest costs over the life of their loan," said Hardmeyer. "The
cost of financing a college education is at a record low."
Another way to take advantage of the low rates is for borrowers who are
no longer attending school or have graduated to look at consolidating their
eligible student loans, which lock in the interest rate for the life of
the loan. Borrowers will have until June 30, 2003 to consolidate their
loans at the new rate. "Borrowers may want to wait until next spring
to see if rates are going to go lower before they consider consolidating,"
said Julie Kubisiak, Director or Student Loans of North Dakota. A borrower
can "ride-the-tide" to monitor the rates. If the rates look like
they may increase next spring, the borrower will want to consolidate in
June 2003 to attain the best rate. "The lower rates on federal loans
and consolidation allow SLND to continue its commitment of helping people
achieve their dream of a higher education," said Kubisiak.
For more information about student loans or consolidating, student and
parent borrowers should contact their lender.
BND, the nation's only state-owned bank, was established in 1919 to encourage
and promote agriculture, commerce and industry in North Dakota. The nation's
first federally insured student loan was made by BND in 1967. SLND is administered
by BND and offers a variety of loan programs to help students and parents
finance a college education.
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