consolidate federal government loan student

4 Steps to Make the Most of Your Student Loans

San Mateo, CA (PRWEB) July 20, 2006 -- Now that this year's cap-tossing and graduation parties are in the memory banks, the reality of paying for that higher education is setting in -- but students still have options to choose the best way to handle college and graduate school debt.

"Most Americans with student loan debt saw a flood of news articles encouraging borrowers to consolidate their loans before government loans underwent their annual interest-rate increase on July 1," said Brad Stroh, chair of Bills.com, who noted that because of the rising U.S. interest rate environment and a government-mandated reset of rates on student loans, rates on federal student loan debt increased by a substantial 1.84 percent on July 1. "Now that student loan rates are no longer at the 3 percent interest rates they hit during the economy's slowest days, it pays even more to be savvy about borrowing for school or returning to school."

According to FinAid, two-thirds of college students borrow to pay for school, with an average loan debt of nearly $20,000.

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Student loan rates to leap

And that leaves student loan borrowers around Kansas City and across the nation barely a week and a half to lock in some of the lowest college loan rates in their lifetimes.

Lenders and government officials have been warning borrowers for about a month to consolidate their federally backed college loans and lock in low rates now before a 1.8 percentage point jump on July 1 pushes interest costs to 7.1 percent for existing Stafford loans and to 7.9 percent on Parent Loan for Undergraduate Student, or PLUS, loans.

Borrowers who already have begun repaying their various loans can consolidate now and lock in a 5.375-percent fixed rate for the life of their loan. Students who are still in school, or left there so recently that their payments haven't kicked in yet, can lock in an even sweeter 4.75 percent.

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