(by Zach Greenlee, Federal Issues Committee member)
How often does a normal citizen visit the U.S. Treasury website? I’ve increased my visits to once per year since 2013! In 2013, Congress voted to tie student loan interest rates to the auction price of their 10 year note (10 yr T-Note), held every May (see NASFAA article).
For the past two years, as new students ask about the interest rate on their loans, we have been able to say, “Well this year, it’s 4.66%. Next year, it will at least be 2.05%, but it is tied to the rates of the 10 year T-Note and we will have to see what that is after May.” And we have the same conversation but with different numbers for parent’s and graduate/professional students who borrow Direct Loans. We get to assure families that there is a fixed rate on their loans each year, and while we can’t say what the market will do in the future, there is a cap that would limit the interest rates.
On Wednesday, the 10 yr T-Note sold for 2.237%, so given the base requirements mandated by law, we can expect 2015-16 interest rates to be as follows:
- 4.29% for undergrad Direct Loans (Stafford sub & unsub)
- 5.84% for graduate/professional Direct Loans (Stafford unsub)
- 6.84% for Direct PLUS Loans to parents and graduate/professional students
The new rates were also announced on IFAP on Friday.
As soon as the rates are made official and announced by ED through IFAP, we will be able to update disclosure statements, award letter comments, website postings, desk references, and send notification to students and parents. Not only is it a chance to break down some of the jargon we use that is confusing and overwhelming to students, but students might actually start checking the U.S. Treasury website themselves on a regular basis to become more informed on U.S. economic issues. (Hopefully they don’t just get enticed by the auction part of the site, where a Lamborghini is currently selling for $76k).
A few other things to mention:
FSA & ED have a random sample survey that started up on Thursday, May 14th. The survey was announced earlier in the week on IFAP, and is an effort to measure FSA’s performance in terms of the ease with which school partners are able to do business with them. If you have received the survey and want to provide more information on the questions asked, please share your comments/thoughts with the rest of us. There is no mention of how long the survey will be administered or how large of a sample it will collect. Make sure this doesn’t go into your spam folder and please participate if you are selected. An example of what one colleague received is below:
From: "Federal Student Aid, through CFI Group" <email@example.com>
Date: May 15, 2015 at 8:00:00 AM CDT
Subject: School Partners Survey Information - Web Surveys
Reply-To: "Federal Student Aid, through CFI Group" <firstname.lastname@example.org>
As part of our ongoing efforts to ensure that Federal Student Aid provides the best services possible to our school partners and, in turn, supports the school community in administering the Title IV programs for students, you have been selected to participate in a brief survey. Through this survey, which should take less than three minutes to complete, we will assess our performance in terms of the ease with which our school partners are able to do business with us.
Thank you in advance for your thoughtful and candid feedback. Please click on the following link to begin.
An Inside HigherEd article posted on Friday refers to new draft regulations ED should be releasing soon. The draft regulations pertain to debit card and other financial products on campuses. We’ll hope to have more information posted after the announcement has been made.