federal student loan consolidation law

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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Nelnet data tape containing information on 188,000 customers lost by UPS

Lincoln-based student loan provider Nelnet Inc. says a computer data tape containing the personal information of as many as 188,000 customers has gone missing.The company said the tape, which included data on loans serviced by Nelnet that previously were serviced by the College Access Network between Nov. 1, 2002, and May 31, 2006, was in possession of United Parcel Service and cannot be located.Lynnette McIntire, a UPS spokeswoman, said that while UPS cannot locate the tape, the company has no indication that the tape "has gone outside the UPS system."McIntire said UPS is working to allay any concerns Nelnet might have."Obviously this is extremely rare for us, and we feel terrible about it," she said.Ben Kiser, a Nelnet spokesman, said the tape originated from a Nelnet office in Aurora, Colo.Kiser said UPS notified the company in writing July 10 that it could not find the tape.Asked why Nelnet did not inform the public about the missing tape until a week later, Kiser said: "We are proceeding quickly, but in a sensible manner that ensures that we are in the best position possible to support our customers and follow the applicable state and federal privacy laws".Nelnet in November 2005 took over the student loan servicing and guarantee operations of College Access Network, which is the Colorado state-designated guarantor of student loans and administers the federal Family Education Loan Program, providing federal Stafford, PLUS and consolidation loans to students and parents through private lenders. Nelnet said it is notifying its potentially affected student loan customers, as well as other lenders whose customers may be affected.

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