Student loan rates expected to decrease next month

Student loan rates expected to decrease next month

Sallie Mae, a provider of college grants and loans, has released some good news for students who are planning to enroll in campus-based or online degree programs this fall.

Company officials recently announced that interest rates on need-based federal Stafford student loans will decrease by 1.1 percent for the upcoming academic year, bringing the average rate to 4.5 percent.

This change could be enough to cover the cost of a semester's worth of books for students who take out a government-funded loan and plan to pay it off within 10 years after they graduate from a brick-and-mortar or online college. Qualified students can typically borrow between $5,500 and $7,500 per year, depending on how many years they have been enrolled in an undergraduate degree program.

Representatives from Sallie Mae added that rates on non-need-based federal Stafford loans will stay at 6.8 percent this year.

Beginning in July, Stafford loans will be disbursed directly from the U.S. Department of Education. Individuals who wish to take advantage of this financial aid opportunity should fill out the Free Application for Federal Student Aid before they submit other materials.

By Stefanie Hughes