New Bank of North Dakota program allows residents to consolidate student loans | WDAZ
The Bank of North Dakota has a new DEAL for state residents struggling with student loan debt.
The state-owned bank launched a new program Monday that will allow North Dakota residents who have lived in the state for six months or more to consolidate all of their student loans through the bank.
Bank President Eric Hardmeyer said the DEAL One Loan program – believed to the first of its kind in the nation – will allow borrowers to potentially lower their interest rates, extend the payback period of their loans and have lower monthly payments while dealing with a single provider.
“We think that this is a really good program that is going to benefit a lot of North Dakotans,” he said, noting about 50,000 North Dakotans may be eligible for the program.
Hardmeyer said many people are struggling with high student loan payments, with interest rates on a lot of private loans at 9 to 12 percent.
The new DEAL program offers a variable annual percentage rate, which is at 1.73 percent through June 30, or a 5.34 percent fixed APR. Rate increases are capped at no more than 1 percent annually, and the rate can’t exceed 10 percent under the program.
“We think that’s going to provide some protection,” Hardmeyer said.
Unlike the bank’s existing DEAL Consolidation Loan program, the new program allows federal student loans to be consolidated with private loans. There’s no consolidation fee, and repayment terms vary depending on the size of the loan, with a maximum term of 25 years.
As authorized by state lawmakers last year, the bank offered the program to physicians and others in the medical community in cities of 4,500 people or less as a way to make sure it could accommodate the potential increase in loans, Hardmeyer said, adding he’s confident the bank will be able to handle the load.
Gov. Jack Dalrymple, chairman of the three-member Industrial Commission that oversees the Bank of North Dakota, called it “the missing piece” in the student aid program. He said the state’s needs-based and merit-based scholarship programs have grown, “but we still have the problem of old loans, many of them at difficult interest rates. So, it’s a great deal.”
Hardmeyer noted the program may not be right for everyone, as federal loans still offer some features the state program doesn’t, including income-based repayment plans and loan forgiveness options.
The Bank of North Dakota will publicize the program through newspaper ads, college alumni foundations and the Department of Commerce, as well as through local banks and social media, spokeswoman Janel Schmitz said.
“We’re going to hit it hard,” Hardmeyer said.
More information about the program is available at banknd.nd.gov.
(Photo Credit: US Uncut)