WEDNESDAY, JUNE 16, 2004
NEWS
THE UNIVERSITY DAILY KANSAN
11
Low rates make loans easier
Lower interest rates on student loans are leading to more college degrees
By John Scheirman
jscheirman@kansan.com
Kansan staff writer
Federal student loan interest rates are falling to their lowest level in 35 years. But the effects on student borrowers will depend on the types of loans they have.
According to The Washington Post the new rates will take effect on July 1.
Borrowers with Stafford loans issued since July 1998 will see rates drop from last year's rate of 3.42 percent to a new rate of 3.37 percent.
U. S. Secretary of Education Rod Paige said in a press release, "Low-cost student loans have made college a reality for millions of students and their families, and lower interest rates mean more money in the pockets of the borrowers."
According to the U.S. Department of Education's press release that accompanied Paige's announcement, interest rates on most student loans are determined using a formula set by law.
Factors involved in the formula include whether the borrower remains in school, or is in a grace period, deferment or repayment status.
The department's statement provided
"Being a graduate student and having six years of student loans, I appreciate any help I can get."
Natalia Gian Garden City graduate student
the following example for the effects of decreasing rates: "Compared to three years ago, when the interest rate was 5.99 percent, borrowers with $10,000 in student loan debt and a 10-year standard repayment plan can save $1,523 in interest over the life of the loan."
Repayment periods on federal student loans can vary from 10 to 30 years. The loans can provide for borrowers to make the same repayment amounts throughout the repayment phase, or for payments to start lower but increase over a period of time.
For all federal loans at the University, the average level of debt for students graduating from December 2002, to May 2003 was $18,271, said Stephanie Covington, associate director of the Office of Student
Financial Aid, 50 Strong Hall.
Covington advised that a Web site maintained by the U.S. Department of Education, www.loanconsolidation.ed.gov, provides an online calculator that can be used to estimate the effects of various interest rates by entering the loan balance and the length of the repayment period.
"Being a graduate student and having six years of student loans, I appreciate any help I can get," said Natalia Gian, Garden City graduate student. "I don't know how much difference that will make. But I appreciate that it's a drop, and not a raise."
"I think it's significant in that it's at a historic low. Most people never thought it would get that low," Covington said. "With a really low interest rate, it might be more manageable for students to keep up with their interest payments while they're in school, rather than having their interest added to the principal balance of the loan when they go into the payment phase."
Covington also said that students with existing loan balances might benefit from consolidating their current loans to take advantage of the new, lower interest rates.
-Edited by Miranda Lenning
STATE
Ticket holders could lose seats under "point system"
TOPEKA — Basketball season ticket holders who have held front-row seats at Allen Fieldhouse for more than half a century are at risk of losing those seats.
The University of Kansas is installing a new "points system" that could move those ticket holders to the top row of the historic old building.
Points are mainly based on donations to the Williams Fund, the revenue-raising arm of the athletic department. People also get points for holding football tickets, graduating from Kansas and being a longtime ticket holder at the fieldhouse.
The new "points system" benefits those people who currently sit up high and have been making big donations for years.
About 9,000 of the 16,300 seats are in question. Jim Marchiony, associate athletic director, said the school figures to bring in about $1 million this year.
"It doesn't give us any pleasure for someone to have to lose their seats," he said. "It would be a lot less work for us if we didn't have the points system. But we need to raise money and we think we've come up with a very fair system to do this."
—The Associated Press
Open Late!! Fast Delivery
GUMBY'S
Pizza
841-5000 • 1445 W. 23rd
(Next to Jack's Nitch)
Monday Madness
14" One Topping
$5⁹⁹
Delivery or Carry Out
Small Meal Deal
12" One Topping
12 Pokey Stix
4 Rolls
Pick two for $13⁹⁹
Rock N Roll Wednesday
75¢ Pepperoni Rolls
$6 Min.for delivery
Pizza Sauce & Ranch
Extra
Pick Up Deals
16" One Topping $6⁹⁹
or
14 Pokey Stix $6⁹⁹
BIG ASS
20" One Topping $11⁹⁹
or
2 for $21⁹⁹
Stix it to Me Tuesday
Buy one Pokey Stix and
receive one of equal or lesser
value for .99¢
Tuesday only