![[Office of Congressman Timothy V. Johnson]](interior_banner.jpg)
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District 15, Illinois |
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| For Immediate Release
May 21, 2003 |
Contact: Matt Bisbee
Phone: (217) 403-4690 (217) 649-1754 |
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Newly Adjusted Student Loan Rates |
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| Washington DC… U.S. Rep. Tim Johnson
(IL-15) joined the U.S. Department of Education today in announcing that
college students will soon be seeing record-low interest rates on their
federal student loans, beginning this summer. Borrowers must apply
for loan consolidation by June 30 to be assured the lowest available rate.
Student loan interest rates -- now at 4.06 percent for most borrowers in repayment -- are expected to fall below four percent when new rates go into effect on July 1. Interest rates are adjusted annually according to a formula based on the interest rates of the 91-day Treasury bills. "The Department of Education anticipates student loan interest rates to drop to lows we have not seen in several decades,” stated Rep. Johnson. “This is extremely welcome news to students at U of I, ISU, EIU, Millikin, IWU and the 11 community colleges in the 15th District. This is a win-win situation for today's students." Borrowers who submit direct loan consolidation applications between now and June 30 will be notified by the U.S. Department of Education's Office of Federal Student Aid (FSA) that their applications will be held until the new rates take effect on July 1. If interest rates were to go up at that time, borrowers who submitted their applications between May 8 and June 30 of this year would be consolidated at the current lower rate. Borrowers who wish to consolidate their loans prior to July 1, can direct FSA to do so. Most federally insured education loans are eligible for consolidation. These include Direct and FFEL (Federal Family Education Loans) subsidized and unsubsidized Stafford loans, PLUS (Parent Loans for Undergraduate Students) loans, Federal Perkins Loans, and HEAL (Health Education Assistance Loans). Through loan consolidation, outstanding student loans are combined into a single loan, and the interest rate is fixed for the life of the loan. More information on student loan consolidation, borrower benefits and eligibility requirements is available on www.loanconsolidation.ed.gov, or by calling the Direct Loan Consolidation Center at 1-800-557-7392 or (TDD) 1-800-557-7395. An online calculator is also available on the Web site. |
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