It Just Got A Bit Cheaper To Borrow Money For College

College hasn’t been cheap for a very long time, but if you’re thinking about taking out a loan for college, we have some good news for you.

Borrowing costs have been reduced for the first time in two years. This change didn’t come as the result of direct policy-making, but it is part of a wider trend of falling interest rates. The Federal Reserve has already brought up the possibility of a rate cut in July, depending on the global economic outlook and trade relations with China.

Regardless of the economic trends behind it, these reductions will benefit upcoming undergraduates at a time when student loan debt is the reality for most students. American student loan debt is sitting at over $1.6 trillion, a figure which has more than doubled in the last two decades. Unfortunately, the most recent cuts likely won’t have a massive impact on students and their families. The amount of money a family can take out for student loans is limited by the government based on several factors. If you make certain choices in the location of your school, or if your parents still claim you as a dependent, you may be eligible for larger loans.

The 2019-2020 academic year will see loans reduced from 5.04% down to 4.53%. Loans for the parents of undergraduates have also fallen from 7.60% down to 7.08%. These rates will only apply to new loans taken for the upcoming academic year.

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5 years ago
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