Financing tuition gets easier.

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Author: Lord, Mary

College isn't getting any cheaper, but a just-approved overhaul of federal financial-aid rules should make it more affordable. The higher-education reauthorization bill, which cleared the Senate last week and is expected to be signed into law by the president, lowers the interest rate on student loans taken out after July 1, 1998, to 7.46 percent--the lowest rate in 17 years. (A student borrowing $13,000 would save about $700 in interest payments over 10 years.) The bill also allows graduates with federally backed private loans, or current students and graduates who hold direct loans from the government, to consolidate or refinance at that new low rate, but only through January. Pell Grants could rise to $4,500 next year from $3,000, if Congress appropriates the funds. And Congress removed the ban on federal loans for some "distance learners." Have questions? Call the Loan Consolidation Network at (800) 557-7392 or the Federal Student Aid Information Center at (800) 433-3243. Or visit the Department of Education's site (http://www.ed.gov/DirectLoan/consolid.html).

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By Mary Lord