Loan interest rates drop
2.2 percent
By Kurt Esposito
Summer
Editor
Paying back money borrowed for college is going
to become a little easier. As of Sunday, interest rates have decreased
2.2 percent.
The federal government cut the rates to ensure
the country would not slip into a recession.
The rates for Stafford loans borrowed after July
1, 1998 are 5.39 percent — a decrease from 7.59 percent —
while the rates for PLUS loans borrowed after July 1 1998 are 6.79 percent
— a decrease from 8.99 percent.
The rate for loans borrowed before July 1 1998
has also been readjusted — to 6.79 percent.
Stan Jones, Indiana's commissioner for higher education,
said the decrease is beneficial to students. But he said students should
remember that they still have to pay back the loans
"I hope it doesn't encourage students to take out
more loans," he said.
Jones said he does not think the rates will go
up again for some time.
The decrease could be especially helpful after
last May in which the Board of Trustees approved a tuition increase
of 7.5 percent — which translates into an increase of $292 a year
for in-state students and $968 for out-of-state students. And students
could receive more help with paying for college if the board approves
in September a 12.2 percent increase in scholarships and grants.
Under the proposal, the money from scholarships
and grants would increase to $76,681,800, which would be a result of
increases in state awards and Pell grants.
James Almond, vice president of business services,
said added to the money received by students from loans, employment,
and employment related sources the total money received by students
for college would be around $276 million.
Jim David, director of budget and fiscal planning,
said the increase in tuition was made due to a lack of state appropriations,
which would have helped to pay for increases in medical and utilities
costs.
The funds were also needed for an increase in salaries
to retain top level faculty at Purdue.
The University recently increased the salaries
of faculty by over four percent. David said this is a lower increase
than the University had hoped for.
"It is no where near what we need but it's our
best effort given the constraints of the resources of what we had,"
he said.
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