College expenses have been on the rise for quite some time, but there is some positive news for those considering taking out a loan for college.

The borrowing costs have decreased for the first time in two years. Although this change wasn’t a direct result of a policy decision, it aligns with the overall trend of declining interest rates. The Federal Reserve has hinted at a possible rate cut in July, depending on the global economic situation and trade relations with China.

Irrespective of the economic drivers, these cuts will be advantageous for future undergraduates, especially in a landscape where student loan debt is a common reality. Currently, American student loan debt has surpassed $1.6 trillion, more than doubling over the last two decades. Unfortunately, the recent reductions may not lead to significant savings for students and their families, as government-mandated limits govern how much can be borrowed for student loans based on various factors. Depending on choices such as the school’s location or being claimed as a dependent by parents, some students may qualify for larger loans.

For the academic year 2019-2020, the loan rates will be reduced from 5.04% to 4.53%. Additionally, the rates for loans taken by parents of undergraduates have decreased from 7.60% to 7.08%. These lower rates will be applicable only to new loans for the upcoming academic year.