Eastern Michigan University’s Board of Regents established a task force to address the rising cost of college, interest rates on student loans and how the university’s student loan system may be changed.
The task force will review the university’s current debt structure to see if there are alternatives or opportunities to reduce debt service costs through restructuring and refinancing.
“Now is a good time to look at alternatives, as interest rates are relatively low,” Regent Mike Morris said at last week’s Finance, Audit and Investment Committee meeting.
When students file a Free Application for Federal Student Aid, EMU will automatically make them eligible for certain loans including Federal Perkins and Federal Direct loans. There are criteria students must meet beforehand, but the school will also offer additional loans to certain students given consideration for their specific needs.
Currently, 26 credits a year for in-state students costs between $13,000 and $19,000 at EMU. In order to minimize debt, it is recommended that students only accept the minimum amount they will need for school and to look at the interest rates of a loan before accepting it.
EMU currently offers a student loan interest reduction plan, which was a first step towards the new task force. The reductions are limited and are adjusted according to an individual’s gross income.
EMU President Susan Martin said, “To keep tuition affordable for all, we must evaluate all of our expenditures carefully. We hope to save money on interest, much like refinancing a mortgage to lower your monthly payments. Given our most current low interest rates, it is timely and prudent to have a financial advisor review our outstanding debt to determine if any refinancing is appropriate.”
At this point, the task force has been looking at several refinancing alternatives, but as of today, no set deadline or finite goal has been established.
“If there are refinancing options that reduce Eastern’s cost, we’ll want to implement them as soon as possible,” EMU Chief Financial Officer and Treasurer to the board John Lumm said.
