Loan Act Could Lower Tuition Rates - KFYRTV.COM - Bismarck, ND - News, Weather, Sports

Loan Act Could Lower Tuition Rates

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North Dakota graduates have more debt than almost any other state. They'll likely welcome the news that President Obama and Sen. Heidi Heitkamp are working to expand federal acts designed to offer relief.

Some lenders, like the Bank of North Dakota, are also working to help ease the burden.

Speaking from personal experience, I don't know if you're ever completely ready to start giving money "away" so to speak. We agreed that it's a bummer, but it's the price you pay for a college degree.

Hayley Erickson graduated from Bismarck State College with associates degrees in art and science, and says this is the month she's been dreading.

"I went into school and didn't really know, you know, too much about loans. Then, all of a sudden you start getting bills, and it's like, 'Oh my gosh!' I actually have to pay this back," says Erickson.

Doing custodial duties for BSC, Erickson says it's good pay, but paying back her loans will cause some financial troubles.

But there's help. Senator Heitkamp's backing The Bank on Student Emergency Loan Refinancing Act that could help more than 63,000 North Dakota students by lowering interest rates.

President Obama's Pay As You Earn program will let students pay no more than 10 percent of their monthly income in loan payments.

The Bank of North Dakota's Deal One Consolidation loan has helped students whose interest rates have been as high as 13 percent, in some cases go as low at 1.73 percent.

Shirley Glass "We are actually working with Senator Heitkamp about our loan program and sharing the success that we've had. She thinks it's a great model," says Student Loan Manager Shirley Glass. 

Across the nation, borrowers with outstanding loans have interest rates starting at seven percent. The banks says the average sum is around $35,000.

"At an interest rate of about seven you'd be a monthly payment of about $250 a month. If you were to consolidate that same loan here with the bank, using the variable rate term, your monthly payment will be under $150," says Glass.

With 83 percent of North Dakota graduates having some type of debt, every little bit counts.

Traditionally, graduation dates determine loan eligibility, but with the president and Sen. Heitkamp's plans, almost any graduate can sign up for either plan.

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