Connecticut student loan agency drops rate to 4.95 percent

Students at UConn in Storrs (file).

HARTFORD, Conn. (AP) — Connecticut’s college financing authority says it’s offering a lower fixed rate on supplemental student loans following the recent passage of a bill aimed at addressing student debt.

The Connecticut Higher Education Supplemental Loan Authority announced Wednesday it has put forward a fixed interest rate of 4.95 percent for new loans, the lowest in the authority’s history. That’s a drop from 6.75 percent.

CHESLA also agreed to increase the maximum allowed debt-to-income ratio, from 40 percent to 43 percent.

Created in 1982, CHESLA has been a supplemental loan source for students who need to borrow more than the maximum amounts provided by other loan programs.

The recent legislation, which still awaits the governor’s signature, clarified that CHESLA could use funds from the Connecticut State Loan Foundation to help finance its bonds.

Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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