NEWS RELEASE

July 2,2002

Alma Bowen 770-724-9018

Interest Rates on Student Loans Drop Again

The interest rate for federal student loans dropped dramatically on July 1, 2002, providing significant savings for current and prospective college students as well as parents. The Stafford loan for prospective students and current students who first obtained the funds on or after July 1, 1998, has dropped from 5.99 percent to 4.06 percent. The PLUS loan rate for parents, who get college funds for their offspring, dropped from 6.79 percent to 4.86 percent.

Borrowers who already have student loan debt won't have to contact their lenders to get the new rate, but will see an automatic drop in interest rates as of July 1.

"Last year, rates fell to the lowest levels in decades, and these new rates are even lower" said Ruth Vincent, director of the Georgia Higher Education Assistance Corporation (GHEAC). "The reduced interest rates mean that a student with a Stafford loan will save $193 on each $1,000 of a standard 10-year repayment contract," she said. The change is determined by the rates set for the treasury bills by the Federal Reserve.

GHEAC, the state's designated guarantor for student loans, is a division of the Georgia Student Finance Commission (GSFC), which administers Georgia's HOPE Scholarship Program. GHEAC provides guarantee and support services to schools and lenders throughout Georgia.

Another GSFC division, the Georgia Student Finance Authority, makes Stafford and PLUS loans for college and university expenses and will be using the new lower rates

More information on student loans is available by calling 770-724-9030 in metro Atlanta, toll-free 800-776-6878 or at the Web site, www.gsfc.org.