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Staff members’ work reduces student loan rates

(ATHENS, Ohio – Oct. 8, 2013) With the average medical student graduating with more than $185,000 in student debt, every saved penny adds up.

The diligent work of two members in the Office of Student Affairs will help OU-HCOM students who receive two types of federal loans save money through lower interest rates.

On Aug. 9, President Barack Obama signed the “Bipartisan Student Loan Certainty Act of 2013.” As a result, student loan interest rates changed from a fixed amount to a new formula tied to the uniform index rate of the Treasury bill, retroactive to July 1, 2013.

That change gave students in the Classes of 2016 and 2017, whose student loans were disbursed after July 1, a Stafford Loan interest rate of 5.41 percent (compared with 6.8 percent under the fixed amount) and a Grad PLUS loan interest rate of 6.41 percent (compared with 7.9 percent previously). Unfortunately, third- and fourth-year students whose loans were disbursed prior to July 1 would be subject to the higher interest rates.

However, Marie Barone, assistant director of financial aid, and Michelle Kittle, administrative coordinator, found a way to help loan recipients in the Classes of 2014 and 2015 qualify for the lower rates. They realized that by reprocessing the remaining amounts of the loans yet to be distributed, the lower interest rates would apply.

“There is nothing that we can do about the interest rate on the summer disbursement of those loans, but we’ve been working behind the scenes to cancel all of the upcoming loan disbursements for fall and spring and re-issue them as ‘new’ loans,” Barone explained. Revising the necessary paperwork and re-issuing the loan amounts for the balance of the year allowed the fall and spring loan disbursements to qualify for the lower interest rate. Of the 257 third- and fourth-year students, 242 receive one or both of the loans.

“It was a lot of hard work and we weren’t required to do it, but we’ve got to do everything that we can to watch out for our students and help them by reducing their debt as much as possible,” Barone said.

The average third- and fourth-year OU-HCOM student borrows $47,167 in Stafford loans, Barone said. The fall and spring portion of that amount is $31,445. “To be able to reissue this amount at the lower interest rate will represent a nice savings for our students in the long run,” she said.

 
 
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Last updated: 01/28/2016