Student Loan Rates Forecasted to Hit Record Highs

For Immediate Release
Contact: Joanie Griffin

Santa Fe, NM - June 11, 2024  — According to a recent ABC News article, there will be a rise in federal undergraduate student loan rates to 6.5% by July, up from the current 5.5% rate, the highest rate in 16 years. Under this new rate, a 10-year student loan of $28,000 would accumulate approximately $10,000 in interest. With these new changes, it’s even more important to start saving for education now to help reduce or eliminate the burden of student loan debt. 

The Education Plan®, a 529 education savings plan sponsored by the State of New Mexico, offers a practical, tax-advantaged solution for saving toward future education and reducing student debt.

“Our mission is straightforward: to make future education more attainable and affordable,” said Natalie Cordova, Executive Director of the New Mexico Education Trust Board, the organization that administers The Education Plan. “The Education Plan supports families with a strategic tool to save for future education expenses and lessen the challenges associated with student loans.”

The Education Plan has many benefits including tax advantages where contributions grow tax-free and withdrawals for qualified education expenses are tax-free, offering significant long-term tax savings. Additionally, many states offer a tax deduction on contributions to a 529 plan. The Education Plan is flexible, allowing funds to be used to pay for a wide variety of qualified education expenses from tuition to textbooks and room and board. Additionally, savings in a 529 plan have minimal impact on financial aid eligibility, unlike other savings programs.

The Education Plan equips families with the information and resources necessary to navigate the complexities of education financing, helping them make informed decisions and develop a tailored education savings strategy aligned with their financial goals. Many online tools such as a glossary of terms, tax benefit information, a detailed FAQ, and a help center allow people to access information when it’s convenient for them. 

“By planning and consistently contributing to a 529 education savings plan, families can significantly reduce the need for borrowing,” added Cordova. “This proactive approach helps secure a successful future for students enabling them to embark on their careers with less debt.”

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For more information about The Education Plan, call 1.877.337.5268 or view the Plan Description and Participation Agreement, which includes investment objectives, risks, charges, expenses, and other important information; read and consider it carefully before investing.

Please Note: Before you invest, consider whether your or the beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in that state’s qualified tuition program. You also should consult a financial, tax, or other advisor to learn more about how state-based benefits (or any limitations) would apply to your specific circumstances. You also may wish to contact directly your home state’s 529 plan(s), or any other 529 plan, to learn more about those plan’s features, benefits and limitations. Keep in mind that state-based benefits should be one of many appropriately weighted factors to be considered when making an investment decision.

The Education Plan is administered by The Education Trust Board of New Mexico. Ascensus College Savings Recordkeeping Services, LLC, the Program Manager, and its affiliates, have overall responsibility for the day-today operations, including investment advisory, recordkeeping and administrative services. The Education Plan’s portfolios invest in: (i) mutual funds; (ii) exchange traded funds; and/or (iii) a funding agreement issued by New York Life. Investments in The Education Plan are not insured by the FDIC. Units of the portfolios are municipal securities and the value of units will vary with market conditions.

Investment returns will vary depending upon the performance of the portfolios you choose. You could lose all or a portion of your money by investing in The Education Plan depending on market conditions. Account owners assume all investment risks as well as responsibility for any federal and state tax consequences.

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The Education Plan® and The Education Plan® Logo are registered trademarks of The Education Trust Board of New Mexico used under license.

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