Student loan consolidation rates set to explode; students could pay additional $1,018 per year
March 18, 2005 (PRLEAP.COM) Education NewsStudent loan consolidation rates set to explode; students could pay additional $1,018 per year
Quincy, MA March 14, 2005
College graduates and college students graduating in May of this year have an unexpected surprise lurking around the corner - a potential increase in federal student loan rates that could cost them thousands of dollars each year.
Federal student loan rates are based on the interest rate of the 13-week (91-day) Treasury Bill at the last auction in May of each calendar year; rates set at that auction take effect on July 1 of that year. In the past three years, Treasury Bill rates have dropped repeatedly, making for the lowest student loan rates in the history of the Department of Education's loan programs.
All that is about to change.
Over the last 9 months, 13-week Treasury Bill rates have been creeping up from just above 1% to nearly 2.8%, increasing an average of 0.039% per week. If the 13-week Treasury Bill rate continues to climb at that pace, by the end of May the rate will be approximately 3.233%. The rates can be viewed at http://www.StudentLoanConsolidator.com/consolidation/projected-rates.php
What does this mean for students and graduates? Since Stafford, Direct, and PLUS loans, the most common federal student loans, are variable rate loans based on the 13-week Treasury Bill, students and graduates holding these loans may experience rate increases from 52% to 64%. For students with an average of $30,000 in loans, this rate increase will translate into an extra $1,018 in interest paid every year.
Students and graduates can avoid shelling out thousands of dollars more each year by consolidating their federal student loans before the rate change. According to Jonathan Rudy, director of customer service at www.StudentLoanConsolidator.com, "Graduates can consolidate their student loans and lock in today's interest rates; once locked in, they can't change, which means that graduates will be protected from any further rate changes, and not have to pay any extra interest when rates change later this year."
What about students who are still in school? Mr. Rudy said that StudentLoanConsolidator.com can "reserve" an application for current students. If students apply now and graduate before July 1, 2005, they can receive the current interest rates, but they must apply before July 1 and sooner is better than later.
"With no credit checks, no fees, and no early repayment penalties, there's absolutely no reason for graduates not to consolidate their loans. However, they need to act now," urges Mr. Rudy. "Very often, graduates wait until the last minute to file their paperwork and by then, they may not be able to protect themselves from a drastic rate change. The earlier you apply, the better off you will be, as you'll begin saving more each month."
Students and graduates can request a free information packet and application at http://www.StudentLoanConsolidator.com immediately or call (877) 328-1565.
Contact Jonathan Rudy at StudentLoanConsolidator.com by email at CustomerService@StudentLoanConsolidator.com for more information; to request a free information packet and application, graduates should visit http://www.StudentLoanConsolidator.com as soon as possible.
StudentLoanConsolidator.com is a service of the Edvisors Network, a multi-national education services company offering students options for managing the entire education life cycle, from getting into their college of choice to financing their education and beyond. The Edvisors Network is based in Quincy, Massachusetts, with offices in Quincy and London, England. Visit them on the web at http://www.EdvisorsNetwork.com for more information.