Changes to subsidized loans will be coming allowing lower rates for students looking to pay for college.

Diane Fleming, associate director of client services in Scholarships and Financial Aid, said for the 2008-2009 school year, the rate on direct subsidized loans was 6 percent. In ‘09-’10, the rate will be lowered to 5.6 percent, in ‘10-’11, it will be lowered again to 4.5 percent and finally in ‘11-’12, lowered down to 3.4 percent.

Fleming said this is all in an effort to help college students with the lagging economy.

She said because of economy in Michigan, though, students will still have to shop around to find the perfect university.

“Students will be able to get a college education, they just may have to shop intelligently,” she said. “In Michigan, needy students who are good students, will have sufficient funds with work study and loans.”

Subsidized loans are loans that are awarded based on the financial needs of students and will not be charged any interest until the student gets out of school, while unsubsidized loans add interest from the time the money is received.

Fleming said President Barack Obama has planned many changes to the financial systems many students use including plans to add $500 to the national Pell Grant to a total of $5,350 for 2009-2010

Toby Roth, director of Government Relations, said though everything has been proposed by Obama, he thinks the plan will face many changes by Congress.

“Nothing has gone into effect and you’re going to see some push-back because it’s not fully supported,” Roth said. “What has been submitted may not be reality.”

Roth said though he feels the plan may change he sees it as a step forward.

“(College graduates) have a heavy debt and they need buy a car or a house,” he said. “It’s just going to help (graduates) pay back bills, which is an admirable step.”

Fleming said she has heard many plans from Obama, but isn’t sure that they will all work out.

“(Obama had mentioned) free community college for everyone, which is a costly ambition. I don’t know how we can afford it,” she said.

Fleming said though many people feel college costs have skyrocketed over the past several years, she said costs right now are sticking to what has usually been the cost with inflation.

“(The percent is usually) one-fourth to one-third cost of average incomes,” she said.

Fleming said over the last several decades the prices of everything has increased, from salaries and pay to a college education.

“In terms of Michigan it’s challenging because of so many job losses,” she said. “Is it affordable? It is, but not without sacrifice and planning.”

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