good and bad news for debt ridden law grads

Interest rates on federal student loans fell to 3.37% from 3.42% for those in repayment and to 2.77% from 2.82% for current students -- the lowest rates in the student-loan program's history. The interest rate for PLUS loans, or Parent Loan for Undergraduate Students, slipped to 4.17%, down from 4.22%. The lower rates apply to loans issued after 1998; older loans will have slightly higher rates.

However, interest rates on private education loans are likely to start ticking higher since the rates are variable and are often tied to the prime rate, which tends to move in lockstep with the Fed's changes in short-term interest rates. Rates on private loans -- which typically range between 5% and 6% -- are often updated quarterly.

(Interest Rates Fall For Student Loans Despite Fed Move, Jane J. Kim, WSJ.com, July 6, 2004)

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