Interest rates dropping on some student loans

WARWICK – Student loan benefits recently underwent some changes – including the reduction of interest rates on subsidized federal loans – as part of the College Cost Reduction and Access Act passed two years ago.
At a recent press conference at the College Planning Center in Warwick Mall, U.S. Rep. James Langevin and officials from the Rhode Island Student Loan Authority said the changes that started July 1 include:
&#8226 Cheaper interest rates on need-based, subsidized, federal student loans. The interest rates decrease from 6 percent to 5.6 percent. The rate will drop to 3.4 percent by 2011.
&#8226 Reasonable and affordable monthly college-loan payments. A new income-based repayment program caps borrowers’ monthly loan payments at just 15 percent of their discretionary income. Any current or future borrower whose loan payment exceeds 15 percent of their discretionary income is eligible. After 25 years in the program, borrowers’ debts will be forgiven.
&#8226 Higher Pell Grant scholarships that cover the average tuition at public universities. With funding from the College Cost Reduction and Access Act and the American Recovery and Reinvestment Act, the maximum Pell Grant scholarship for the 2009-2010 school year will be $5,350 – more than $600 above last year’s award. &#8226