President Barack Obama signed into law a measure tying student interest loan rates to the financial market, lowering the rates after they doubled July 1.
Ball State undergraduate students will see a lower rate on federal student loans this fall after Friday’s signing of 3.9 percent and graduate students will have loans at 5.4 percent.
The compromise emerged after heated summer negotiations that would have left students with a doubled 6.8 percent rate that took effect July 1 when Congress failed to come to agreement.
Although this measure means lower loans this semester, the cap for future loans stands at 8.25 percent for undergraduates and 9.5 percent for graduates.
“Our job is not done,” Obama said.
Rob Wirt, associate director of Ball State’s financial aid, scholarships and outreach, echoed the President’s sentiments, reminding students that rates can change.
“Those rates might be good for a year or two,” Wirt said. “Financial aid is an ever-changing landscape.”
Obama said the student loan deal was just one of many measures the U.S. needs to make college affordable in a higher-tech economy that necessitates higher education.
“The cost of college remains extraordinarily high,” he said. “It’s out of reach for a lot of folks.”
He said it adds another burden on families that already have to balance other priorities, like buying a home or car, as well as helping to pay for their children’s education.
Data analysis done by the Project on Student Debt found that 70 percent of Ball State students graduate with some student debt, with the average student owing $25,667 after graduation, just below the national average.
Wirt added that most students take about 10 years to pay back their student loans, but depending on how much money graduates earn, the payments can stretch out to many more years.
According to the Project on Student Debt, Ball State graduates who leave with the university’s average debt can end up paying more than $35,000 due to interest.
White House officials have said Obama plans to create a broad strategy in the coming months to help slow the spiraling cost of college education.
“It’s up to us now to carry forward that tradition,” Obama said in a speech on July 31. “Higher education cannot be a luxury for a privileged few. It is an economic necessity that every family should be able to afford [and] every young person with dreams and ambition should be able to access. And now is not the time for us to turn back on young people. Now is not the time to slash the investments that help us grow.”
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