(WASHINGTON, DC) –Congressman Dennis Moore (Third District-KS) announced today that the typical student borrower who consolidates his or her loans could save thousands of dollars over the life of their loans thanks to new low interest rates.

Starting on July 1st, federal student loan interest rates are expected to drop to a historic low of about 3.5 percent, from the current rate of 4.06 percent. The expected new interest rates will save the typical student borrower approximately $3,200 over a standard ten-year repayment term.

“For thousands of students and families these new low rates will help ease the burden of paying off their college loan debt,” said Moore. “The new rates will provide immediate relief to recent graduates, who are entering a tough job market, through reductions in their monthly payments.”

Over the past eight years, the typical student loan debt has almost doubled to $17,000. In addition, two-fifths of all student borrowers now graduate with unmanageable debt levels.

“Borrowing to pay for college should be the investment of a lifetime,” Moore said. “And yet far too many students are mortgaging their future at too high a cost. Congress fought to make student loan consolidation possible. Consolidation enables students to lock in a low fixed interest rate, saving thousands of dollars over the life of their loans and making their college education more affordable.”

The new low interest rates are part of a larger effort by Moore to make higher education more affordable. Moore has consistently supported increasing the maximum Pell Grant, the student aid program that makes college possible for nearly 5 million students each year.

Borrowers can secure the new low rate by consolidating their loans after July 1, 2003 and before June 30, 2004.

Consolidation may deliver additional benefits to borrowers. Borrowers can eliminate the need to deal with multiple lenders, calculate loan payments based on a percentage of income, and extend their repayment period. The Department of Education also offers an interest rate reduction of .25 percent to borrowers who make payments through automatic banking. Most federal loans can be consolidated either with the Department of Education or a private lender. Recent graduates may also be eligible to consolidate during their in-school or in-grace period, for additional savings of up to 0.6 percentage points.

Borrowers interested in consolidating their loans with the lower interest rate formula should contact the Department of Education or their private lender. More information about direct loan consolidation is available from the Department of Education at 1-800-557-7392 or http://loanconsolidation.ed.gov/.

The analysis was based on an average debt of $17,000 over a ten-year payback period with an estimated 3.5 percent Stafford loan interest rate. The interest rates on federal student loans are re-set each year on July 1st.