Student Loan Rates to Increase July 1

Discussion in 'Current Events' started by Adam's Apple, Jun 21, 2005.

  1. Adam's Apple

    Adam's Apple Senior Member

    Apr 25, 2004
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    Consolidate College Debt by July 1 for Big Savings
    By Jeff Brown, Philadelphia Inquirer
    June 12, 2005

    Ah, to be young, fresh out of college, your whole life ahead of you. ...
    If it weren't for that mountain of college debt — typically about $20,000 for new graduates — everything would be perfect. To make matters worse, interest on federal variable-rate loans is about to leap.

    Fortunately, borrowers have a great option: Act before July 1 and lock in your debts at today's rock-bottom rates. Wait until later and repaying the loans could cost thousands more.

    On July 1, rates on all federal student loans will rise by nearly 2 percentage points. Rates on Stafford loans on which payments already have begun, for instance, will jump from 3.37 percent to 5.3 percent. (The rate on a Stafford loan adjusts every July 1 until the balance is paid off.)
    But by refinancing by July 1, the borrower can lock in with a new fixed-rate loan at 3.375 percent. Do it later and the rate will be 5.375 percent.

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