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Students scrambling to lock in student loan rates
JEFFERSON CITY, Mo. (AP) — Thousands of college students and parents are clogging phone lines and rushing to Internet sites. They're scrambling to refinance college loans before a sharp interest rate increase this weekend.
An almost-two-percentage-point interest rate increase for federal student loans kicks in Saturday. Advisers say not refinancing could cost thousands of additional dollars in interest in the decades after a student enters the work force.
The federal government adjusts interest rates on its student loans each July first based on a formula tied to the yield on short-term Treasury bills.
Right now, the rates are 4.7 percent for students and 5.3 percent for graduates.
On Saturday, the rates will shoot up to 6.54 percent for students and 7.14 percent for graduates.
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Students rush to refinance loans
College students around Kentucky are racing to refinance their student loans before a steep interest-rate increase this weekend.
An increase of nearly 2 percentage points in the federal student-loan rate -- moving the interest graduates would pay above 7 percent -- kicks in Saturday. Advisers say that not refinancing before the annual revision could cost a student thousands of additional dollars in interest in the decades after he or she enters the work force.
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