student loan interest rate
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Students pressed to consolidate their loans
Student loan interest rates will go up almost 2 percent on July 1, but consolidating now can lock in the current rate.
By consolidating student loans now, the interest rate will turn from a variable rate to a fixed rate, saving students thousands in interest over the life of the loan. Consolidation does stretch out the life of the loan, but decreases the monthly payments.
The interest rate on Federal Stafford Loans is 5.3 percent, according to Staci Schiller of Wells Fargo. The increase will bring it to 7.14 percent.
Loans taken out after July 1 will also be at fixed interest rates, instead of variable rates.
"I need to consolidate," said Beth Arnason, UND student. "I didn't know that it would lock in the lower interest rate. I will definitely look into it."
But when students consolidate their loans, they lose their six-month grace period after finishing school.
More student loan interest rate info
Final chance to save
College students have only a few days left to consolidate their student loans and lock in current interest rates before those rates go up Saturday.
Under the Deficit Reduction Act passed by Congress in 2005, student loan interest rates will be hiked, meaning higher payments for millions of student borrowers.
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