sallie mae student loan services

Student loan consolidation deadline is Friday

People with student loan debts are scrambling to consolidate their loans before interest rates increase on Saturday, July 1.

Interest rates on existing federal student loans will increase nearly 2 percent to between 7 and 8 percent in July, as part of an adjustment the government makes every year.

That means that if you currently have unconsolidated federal student loans, your overall payments will rise.

Experts say that with interest rates headed upward, consolidation could be a good deal for many debtors.

"There really isn't a lot of reason not to do this," says Seamus Harreys, dean of student financial services at Northeastern University in Boston.

"It's the student loan world equivalent of refinancing a mortgage," says Martha Holler, a spokeswoman for Sallie Mae, a leading provider of student loan financing, though there is a caveat.

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Loan rates to increase on July 1

This example is based on a student paying off their loan over a 20-year period. Source: Erin Korsvall, a spokesperson of Sallie Mae, Inc.

For more information on loan consolidation, go to www.salliemae.com and loanconsolidation.ed.gov

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Students wanting to lock in lower interest rates should consolidate their federal student loans by June 30.

As of July 1, interest rates will increase and students who have federal loans will not have the option to consolidate until they graduate, said Larry Moeder, director of admissions and the Office of Student Financial Assistance.

In the past, the interest rate has been a variable rate, Moeder said. It fluctuates from year to year depending on the economy.

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