Interest rates for federal student loans were significantly increased in 2006 from approximately 2% to approximately 7%. For the national average student loan amount of $23,000 and a standard ten year repayment schedule lowering the interest rate back to approximately 2% would save approximately 20% (or $65) on monthly payments. Similarly this would save approximately $6,500 in total interest paid during the ten year period, lowering the total cost of a $23,000 student loan from approximately $31,000 to $25,000.
If lowered back to 2006 rates all current holders of federal student loans, no matter the issue date, shall be allowed to refinance and consolidate at the lower rates, effective immediately.