student loan consolidation program

Loan consolidation deadline June 30

Students can consolidate their loans at the lower rate, even if they are still in school and plan to take out more loans.

Students who have multiple lending programs can merge their loans into one payment plan, said Wayne Sparks, early assistant manager for the Oklahoma Guaranteed Student Loan Program.

He said students who want to consolidate loans should contact their lender to find out options for consolidation.

There are both benefits and drawbacks to student loan consolidation. The main benefit is students have only one lender to worry about instead of several, Sparks said.

In addition, consolidation companies also help students by reducing their bills to one each month, as well as giving students an extended payment period of 10 to 30 years, he said.

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Student loan interest rates set to increase

Today is the last day student loan holders will have to consolidate their debt without feeling the hit of the nearly 2-percent increase in interest. The Federal Stafford loan rate will rise 1.93 percent July 1 and parent loans for undergraduate students (PLUS) will rise 2.4 percent, marking the largest jump since 2000. The change stems from a new bill that was incorporated into the Deficit Reduction Act of 2005, S. 1932, according to a press release from the Montana Guaranteed Student Loan Program.Ron Muffick, director of business relations and programs for the MGSLP, said, "Because of the interest rate change effective July 1, I encourage borrowers to contact their lenders to explore all of the options for repayment including consolidation."The average student debt for a Montana borrower is $20,000, quite less than the national level of $50,000, according to the American Council on Education."The rate increases mean higher interest payments for students and graduates over the life of their loan," said Jim Stipcich, president of Student Assistance Foundation.

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