Student loans are already less expensive and easier to repay, and now you get to deduct the interest... Because of what we have done, we can make college as universal in the 21st Century as high school is today. And, that will change the face and future of America.
- President Bill Clinton
January 27, 1998
Today, Vice President Gore announces an Administration proposal to move forward with a scheduled 10% reduction in the interest rate on student loans, while improving the program to help ensure lenders an adequate profit.
Students Will Benefit Substantially From The Interest Rate Cut. Under reforms enacted in the 1993 budget deal, the interest rate on student loans will drop by an estimated 10% on July 1, reducing the rate students are projected to pay on loans from an average 7.8% over the next five years to 7.0%. This drop will save borrowers hundreds of dollars in interest.
Lower Rates Can Be Profitable For Lenders. To eliminate unnecessary costs to lenders, the Administration is proposing that the formula for setting the interest rate be adjusted so that it more closely tracks lenders' own financing practices, eliminating inefficiencies, and making a lower rate possible for student borrowers.
The largest investment in higher education in 50 years. This announcement is part of the Administration's efforts to identify fiscally responsible policies that help strengthen education and expand college opportunity. To expand college opportunity the President and Vice President are:
February 27, 1998
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