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Money

The www.FedPrimeRate.com Personal Finance Blog and Magazine

Saturday, May 13, 2006

It's Déjà Vu All Over Again: Student Loan Consolidation Rates Are Set To Increase On July 1, 2006

The good folks @ NextStudent.com (NextStudent.com offers no cost student loan consolidation) issued a press release yesterday to remind everyone that student loan consolidation rates are going to rise on July 1, 2006. July 1ST is almost here, so if you plan on consolidating, now's a good time to do it!

Here's a snippet from yesterday's press release:

"It is a good idea for students and graduate students to consolidate their student loans before July 1, 2006, when interest rates are set to increase, according to NextStudent, the Phoenix-based premier education funding company. With little more than seven weeks remaining until the deadline, students are running out of time before the federal student loan program will be impacted by changes in rules and regulations.

The federal student loan program took some major hits with the passing Feb.8 of the Deficit Reduction Act of 2005, S. 1932. Although programs including Medicare and Medicaid were reduced, the federal student loan program was hit hardest with approximately $12.7 billion in cuts.

If students do not consolidate they likely will end up spending thousands more in total repayment on their student loans. That coupled with the higher cost of college and the decrease in federal student loan programs, students are finding it is more difficult to receive a college education.

Federal student loan consolidation can help. Consolidation collects all of a student’s loans, such as Stafford and PLUS loans, and packages them into one, allowing for one easy monthly payment. In addition, through consolidation the interest rate is locked in for the loan’s lifetime. For the long term, students can save upwards of 60 percent, which adds up to thousands.

NextStudent offers in-school borrowers a 4.75 percent interest rate. Eligible borrowers can receive an interest rate of 2.75 with applied benefits. This rate’s incentives include the .60 percent savings for those students who consolidate after graduation, an Auto Debit incentive equal to a .25 percent reduction, and a 1 percent additional decrease after the first 36 consecutive on-time payments.

Students can help themselves and save money that can be used for other daily expenses when they consolidate before the expected July 1 deadline. With student loan consolidation poised for major changes and interest rate hikes, it is important to consolidate while there still is time.

About NextStudent

NextStudent, student loan consolidation programs, and college savings plans.

The NextStudent Scholarship Search Engine, one of the nation’s oldest and largest scholarship search engines, is updated daily, available free of charge, completely private – and represents 2.4 million scholarships worth $3.4 billion.

For more information about NextStudent and its student loan programs, please visit the company’s Web site at http://www.nextstudent.com/."


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