Students Consolidate Loans Now To Save Thousands In Interest
Below is a MRR and PLR article in category Finance -> subcategory Loans.
Students: Consolidate Your Loans Now to Save Thousands in Interest
Summary:
College is becoming more expensive, but recent grads and upcoming graduates still have a chance to secure a low fixed interest rate on their student loans.Article:
As college costs continue to rise, recent legislative changes have made the student loan landscape even more challenging. Congress recently passed a bill that raises interest rates on student loans while cutting $13 billion from the federal student loan program. These changes will significantly impact loan repayment costs for students for many years.
The bill affects both Stafford loans, which are popular due to no need for credit checks, and PLUS loans, which parents can obtain irrespective of financial need. New Stafford loans will see interest rates rise from 5.3% to 6.8%, while PLUS loans will increase from 6.1% to 8.5%. These rates will be fixed.
Over the past eight years, tuition, room, and board costs have escalated at more than twice the rate of inflation. Consequently, student loan debt has also surged, climbing over 70% from $11,400 in 1997 to more than $20,000 in 2005.
However, there's still good news for recent graduates or those graduating this spring?"they can lock in a low fixed rate. But time is running out. With the rate hikes set for July 1st this year, students need to consolidate their loans by June 30, 2006.
"Time is crucial, especially for this year's graduates," stated Frank Ballmann, a student loan expert and executive vice president at Educational Direct. "They need to act quickly post-graduation to benefit from the pre-July 1 rates, which will increase by over 1.5% based on current interest rates."
Ballmann's Tips for Students and Parents:
- Avoid Extra Costs: Students with $20,000 in loan debt might pay an additional $300 in interest next year if they don't secure the current consolidation rate.
- Fixed Rates: Consolidation loans can have a fixed interest rate throughout the repayment period.
- Save Money and Time: Consolidation simplifies repayment?"a single fixed rate and one monthly payment.
- No Fees: There are no fees or credit checks required to consolidate student loans. This is a federal right under the Higher Education Act.
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