New federal legislation will cut student loan interest rates from the current 6.8 percent to 3.4 percent over four years, saving $4,200 for the average Michigan student who starts college in 2011, reported Congressman Bart Stupak.

The bill cuts the interest rate on new loans in half, in five steps. In 2007, rates will be cut from 6.8 percent to 6.12 percent; in 2008, to 5.44 percent; in 2009, to 4.76 percent; in 2010, to 4.08 percent; and in 2011, student loan interest rates will reach 3.4 percent.

The reductions were made possible by reducing subsidies to lenders.

Michigan students with federally subsidized student loans number 143,000.