Effects Of Economic Downturn Visible To Student Borrowers

Abstract:

The Federal Reserve’s Open Market Committee cut the federal funds rate – the overnight loan rate between banks – to 3.5 percent from 4.25 percent yesterday. The interest rate cut is good news for many private student loan borrowers who have variable interest rates. Several loan providers are lowering prime interest rates – the rate that serves as the benchmark for many private student loans – in lock-step with the Fed’s announcement. But several news sources are reporting that the recent economic downturn and belt tightening in the credit markets will negatively affect many student loan borrowers.

The full article was originally published in NASFAA’s Today’s News on 1/23/08.