Contact: Sandy Connolly, Director of Communications
Office of Higher Education
St. Paul, MN--The Minnesota Office of Higher Education (OHE) is pleased to announce a reduced interest rate on the State of Minnesota SELF V fixed interest rate student loan.
The new fixed rate is 6.9%, down from the previous rate of 7.25%. The SELF Loan also carries a variable rate option at 3.3% through June 30, 2013.
"Our first recommendation to every student is to consider all options other than loans when paying for college," said Marilyn Kosir, SELF Loan Manager at OHE. "However, sometimes borrowing is the only option available, so we work hard to keep SELF Loan interest rates and terms competitive."
In 2012, over 14,000 Minnesota students borrowed $85 million through the Minnesota SELF Loan program. This number was down from 2009, when $125 million was loaned to 24,700 students. According to Larry Pogemiller, Director of OHE, this drop in participation was due to the new federal preferred lender requirement, which restricts the ability of many colleges from informing students about state run loan options.
"When Congress passed the Higher Education Opportunity Act of 2008, it became more difficult for students to learn about high quality, often less expensive, state-based student loan programs," said Pogemiller. "As a result, students and parents often choose the federal PLUS loan, which schools are allowed to actively promote, instead of the lower-interest rate SELF Loan.
With student debt on the rise, it is more important than ever for students and families to find the most affordable option."
Minnesota is one of 15 states that offer a state loan program with borrower-friendly terms. Colleges must certify the loan, there is no prepayment penalty, and students are charged the same rate of interest regardless of the type of postsecondary institution they attend. State loans help meet the net price of attendance after other forms of financial aid are deducted.
The SELF program operates at no cost to the state, with funding provided by revenue bond proceeds, investment earnings and student loan repayments from borrowers. SELF Loans are available to Minnesota students attending eligible postsecondary institutions within or outside Minnesota and to non-residents attending eligible postsecondary institutions in Minnesota. There are no minimum or maximum income thresholds and no application fees for the SELF Loan program. Students pay only interest on their SELF Loan while in school.
For information about the SELF Loan program, students can contact the financial aid office at the college they attend or are considering attending, or contact the Minnesota Office of Higher Education at (800) 657-3866 or (651) 642-0567, or visit www.selfloan.state.mn.us.