Starting July 1st students with federally subsidized student loans will see a drop in their interest rates.

Currently students are paying 6.8% interest on their need- based student loans; those rates have dropped to 6% July.

This is welcome news for low- and middle income students, whose parents have to decide if they can even afford to send their children to college.

Rep. James Oberstar said, "I draw on my own experience, I know my children who are now in their forties still paying off student loans trying to figure out how there're going to educate their children.
And most American families are in the same fix that they have to.

They're still paying off very high cost student loans and there've been no adjustment over the past twelve years of the republican majority and we made it happen."

In Minnesota roughly 67,000 students take out a federal loan to pay for their higher education.

With the new interest rates in place, students may find savings of nearly $4,500 over the life of the loan.

Oberstar says this is just one piece of a bigger picture when it comes to the nation's students.

"There has to be more investment in higher education, community college education, vocational school education and we're going to address those issues in the next congress," he said.

The College Cost Reduction and Access Act has also increased the Pell Grant Scholarship to nearly $5,000, and provides tuition reimbursement for educators teaching in high-need school.

Over the life of this act interest rates will decrease in phases with a final interest rate of 3.4%.

That's certainly good news for upcoming freshman.