best consolidation loan rate student

Hours Remain for Borrowers to Lock in a Low Interest Rate Through Student Loan Consolidation

In a matter of hours, on July 1, interest rates on most federally guaranteed student loans will jump by nearly 2 full percentage points. To avoid the rate increase, borrowers must submit their Federal Consolidation Loan application by midnight on Friday, June 30, 2006.

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To respond to last-minute requests from borrowers seeking to lock in today's interest rates through student loan consolidation, Sallie Mae will divert all available customer service personnel to focus on helping individuals with consolidation-related issues.

"By redirecting all available resources in the final hours of this unusual interest rate environment, we will help our borrowers receive the best possible service and the lowest possible rate when they consolidate their loans," said Keith D'Ambra, senior vice president of loan consolidation, Sallie Mae.

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THE COLOR OF MONEY: Deadline near for student-loan consolidation

WASHINGTON Just as hurricane season comes every year, so too does the quandary of whether students and their parents should consolidate student loans.

This year, the answer is fairly easy for most borrowers: Yes. The deadline for con solidating to get the best interest rates is June 30.

By law, 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.

That auction took place May 30. The interest rate for the one-year period beginning July 1 will be 6.54 percent for borrowers who are in school or in a grace or deferment status. Loans for borrowers in repayment will be set at 7.14 percent.

Although lenders make it seem as if consolidation is a no-brainer, I've received a number of e-mails from parents and students seeking a little more clarification.

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