consolidate loan student washington

Large Student Loan Interest Rate Hike Looms

(AXcess News) Washington - One of the largest interest rate hikes on college loans is set for this Saturday, July 1, as student debt and the cost of attending college in the United States continue to rise. Federal student loan interest rates will rise and consequently, many students and alumni are scrambling to consolidate their loans. The move comes as a result of the Deficit Reduction Act signed by President Bush in February.

Interest rates on existing and new federal college loans will rise dramatically on July 1. The interest rate on Stafford loans will rise from 5.3 to 7.14 percent on existing loans and to 6.8 percent on new loans. This will mean $2,000 in additional interest payments for the typical undergraduate borrower who currently graduates with $17,500 in debt.

Gregory Cendana,a UCLA Sociology Major said, "I needed to work two jobs in the summer and most of the school year to ensure that I was able to afford the high fees.

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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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