Oct. 29, 1998
Contact: Julie Kaplan
(804) 982-6000
JAK@virginia.edu

U.VA. ALERTS STUDENTS, ALUMNI TO OPPORTUNITY TO SAVE
IN PAYING OFF HIGHER EDUCATION LOANS

	University of Virginia financial aid officers are notifying
students and alumni of a new federal loan that could save them hundreds
of dollars of debt in paying off higher education costs.
	Staff members in U.Va.'s Office of Financial Aid to Students are
using numerous communication methods to alert undergraduates, graduate
students and alumni to a critically short time in which they have to
apply for a new consolidation loan from the U.S. Department of
Education.  
	The Higher Education Amendments (HEA) of 1998 that were recently
signed into law by President Clinton allow student and parent borrowers
to apply for a consolidation loan from the education department's Direct
Loan Program at an interest rate of 7.46 percent.  
	The rate, which will be in effect only through January 31, 1999,
is significantly lower than the existing rate on most federally insured
educational loans.  Those rates generally run 8.25 percent for student
loans and 9 percent for parent loans.
	Although the interest rate on a consolidated loan would be
adjusted annually, it would be based on a lower interest rate formula
for the life of the loan, according to the education department.  
	"The Department of Education estimates that most students who
consolidate their loans may save $500 per $10,000 of debt over a
ten-year repayment period," said Julie A. Kaplan, associate director in
U.Va.'s financial aid office.
	Because of the savings potential, financial aid officers are
distributing mass e-mails to currently enrolled students and to alumni
who have graduated since 1989.  They are publishing the information in a
November newsletter being mailed to alumni in the classes of 1994
through 1997, and they have included the information in reunion notices
being mailed to the class of 1989.  
	
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	Financial aid officers are also describing the loan in workshops
for high school students, parents and guidance counselors.  They have
the loan information recorded on the office phone line, and they have
posted the HEA information on the office's web page:
http://minerva.acc.virginia.edu/~finaid/current.html.
	"Because of the short time frame for applying for the
consolidation loan, we're trying to reach all currently enrolled
students and alumni," said Kaplan.
	For loan borrowers still in school, the new rate applies to
students who hold Direct Loans only.  Currently enrolled borrowers who
hold a mix of different kinds of student loans are not eligible for the
new reduced rate, Kaplan said.
	For borrowers who have already graduated and who have loans to
repay, several points should be noted: 
¥ At least one Direct Loan or one Federal Family Education Loan must
be included in the consolidation. 
¥	There is no consolidation fee or minimum balance.
¥ A loan holder can consolidate a single loan, an existing
consolidated loan or several federally guaranteed loans from different
sources.
	For more information, call U.Va.'s financial aid office at (804)
982-6000 or contact the Department of Education's Direct Loan
Origination Center at (800) 557-7392 or access its web site at
http:www.ed.gov/DirectLoan.
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