Friday, March 10, 2006
Consolidate Student Loans by 6/30!
"There's been a lot of media coverage lately of how interest rates on new student loans are rising because of the recent Deficit Reduction Act. This coverage, however, obscures a far more important and actionable event. Interest rates on existing student loans are set to rise by over 1.6% based on the most recent Treasury bill auction. The repayment rate for existing Stafford loans to students would be 6.93% based on that auction, a rate higher than the 6.8% rate for new loans. There is good news, however, because borrowers who already have student loans can lock in their existing interest rate, which could be as low as 4.75%, by consolidating prior to July 1."