The Bank of North Dakota will process more than 7,000 applications for federal student loan consolidations after being inundated last week with requests to lock in an interest rate.

A mad rush of applications came in June because interest rates increased on July 1.

Julie Kubisiak, senior vice president and director of student loan services, said the bank has finished processing about 4,200 applications and has about 3,000 to go. Those applications started coming in steadily at the the end of May through June.

The bank received about 11,145 phone calls regarding student loans in June, which is more than double the normal amount of between 4,000 and 5,000 per month.

Kubisiak said students were able to lock in an interest rate of as low as 4.71 percent.

Federal loan consolidations are now expected to slow because now the rate people can lock into will be 6.8 percent.

"This might be the end of the consolidation industry as we know it today," Eric Hardmeyer, president of BND, told the Industrial Commission last week. Hardmeyer also said that students could lock in a rate as low as 3.625 percent last year.

The Industrial Commission, which oversees the bank, is comprised of Gov. John Hoeven, Agriculture Commissioner Roger Johnson and Attorney General Wayne Stenehjem.

Johnson, a Democrat, said the state could use some of the bank's profits to make student loans more affordable.

Hardmeyer said there needs to be a balance between loan programs and savings to help students pay for college.

"Ithink we'll come back with some legislation to do something,"Hardmeyer said.

Hoeven, a Republican, said the state has taken steps to keep costs down, including paying students' 2-percent origination fee and a 1-percent federal default fee.

"If you want to change the rates, you'd better talk to Congress," Hoeven said.

According to the U.S. Department of Education, interest rates on most existing federal student loans are variable and are calculated based on a formula that uses the interest rate of the 91-day Treasury bill set at the last auction in May of each year, plus 1.70 percent for loans in an in-school, grace, or deferment status, and 2.30 percent for loans in a repayment status.

Kubisiak said about 60 percent of North Dakota college students have their student loans through the Bank of North Dakota.