5% down on interest rates, 4% on home loans and 1.75% on credit cards, credit card offers to people

LANSING, Mich.
— For the first time, a state agency is allowing people to borrow from their own homes for a fraction of what they would have paid if they had been forced to pay off their student loans and other debts.
Michigan, with its high costs of living, low tax rates and strong economy, has become an attractive place for borrowers.
About 2.3 million borrowers are enrolled in private student loan programs, and a total of more than $4.5 billion in federal loans and $3.4 billion in state loans are outstanding, according to the Michigan Department of Education.
The average monthly payment for those borrowers is about $3,500.
The state also offers loans to people who have incomes up to about $75,000 and whose monthly payments are between $10,000 to $25,000.
Borrowers who meet certain income and credit criteria are eligible to borrow up to $2,000 for up to 12 months, according in an email.
It is unclear whether Michigan will offer any discounts for low-income borrowers.
In an email, the department said it was reviewing the policy and will respond soon.
Last year, the Michigan legislature approved a $2.6 billion state budget for the fiscal year that starts Oct. 1.
About $1.2 billion in new borrowing was authorized, and another $2 billion is projected to come from an additional $1 billion in borrowing in the 2018-19 budget.
A total of 1.7 million people have been eligible for loans through the program, which was launched in September 2015.
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Jennifer Granholm has pledged to expand the program to more than 1 million people.
Under the new rules, students who qualify under the program will have the option to apply for a home loan up to the maximum amount that they could borrow from a federally-backed loan that they own.
That is up from the $1,250 maximum that students who borrow from home can borrow under the state’s current rules.
Once a student has secured a loan, they can either pay it off in full or defer the interest payment until they move into a new home.
Students with low incomes or those who cannot repay their student loan payments are eligible for up, 2.75 percent, and 1 percent interest rates.
They also can borrow up 4.75 percentage points for a loan they own, a maximum of $1 million.
Morrowers must have at least a 2.5 percent loan-to-value ratio, which is higher than the 2.25 percent loan to value ratio that is typically used in state-sponsored student loans.
The interest rate for a $100,000 loan is 5.45 percent, the lender would pay 4.25 percentage points on that loan and the borrower would repay $100 in full and get $50 in a deferral period.
To qualify for a federal student loan, a borrower must have income up to 300 percent of the federal poverty level.