consolidate federal student loan

Consolidation deadline for student loans nears

Kimberly Brown was eager to consolidate her multiple student loans - and lock in a low interest rate - when she graduated from Mercer University in May.

"You really don't have a choice with the interest rates going up in July," she said.

Brown, who has $30,000 in student loans, is just one of thousands of borrowers across the country who have just one week left to decide if they want to consolidate.

Starting July 1, the interest rate on federal loans for current borrowers who are still in school, in their grace period or in deferment will increase from 4.7 percent to 6.54 percent. Loans for borrowers in repayment will increase from 5.3 percent to 7.14 percent.

Stafford loans, one of the most common, will be set at a fixed rate of 6.8 percent.

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Federal loan rates face changes

After Saturday, college students at OSU and across the country will no longer be able to secure a federal loan at the current interest rates. Rates on the Stafford and Parent PLUS loans are set to increase by 2 percent, with the rates on Stafford subsidized and unsubsidized loans increasing from a variable of 4.7 percent to a fixed rate of 6.8 percent, and the Parent PLUS loans increasing from a variable rate of 6.1 percent to a fixed 8.25 percent. These loans can be bundled into one consolidation loan and secured at a lower fixed interest rate of 4.7 percent. In order to minimize the number of students repaying loans at higher interest rates, the federal government is allowing students to consolidate their federal loans while they are still in school. Students who are currently enrolled at any accredited institution have the option of applying for a Direct Consolidation Loan from the U.S.

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