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Student loan rates to jump Saturday
As the weekend approaches, many Americans are looking forward to this years upcoming Fourth of July celebrations. But for some Americans the new month could mean losing thousands of dollars over the next few decades.On Saturday, interest rates for federal student loans increase by almost 2 percent, bringing college students interest rates to 6.54 percent for students and 7.14 percent for graduates. The jump includes raising parents rates if a loan was taken out to finance a childs education, though the interest percentage varies with each loan.To avoid paying the higher rates, some borrowers hope to lock in lower rates on their loans by consolidating them before Saturday. Annette McDonough, a banker at Cleburnes Wells Fargo branch, said there are many advantages to student loan consolidation.Consolidation can give cheaper interest rates, and can lock in your rate percentage, she said.
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Students are advised to shop around for loan consolidator
With less than a week remaining before student-loan interest rates spike, borrowers are being flooded with loan consolidation offers.
Solicitations arrive in e-mails, pop-up ads and letters. They come from banks such as Bank of America, Wells Fargo and Wachovia, and from hundreds of Internet-based companies.
Melet Leafgreen, assistant director of loan programs at Texas Christian University, said students have been coming to her department for help sorting through stacks of mailers, postcards and fliers. "It's very confusing to get through all of those things," she said. "They're all the same, just displayed five different ways."
Beginning Saturday, interest rates on new Stafford loans will be fixed at 6.8 percent, but variable rates on existing Stafford loans will jump almost two points, according to the U.S.