Avoid Big Jump in Student Loan Interest Rates
On July 1, interest rates on student loans will see the largest single-year increase in 40 years of the federal student loan program.
Washington, DC (PRWEB) June 16, 2005 -- Lamaute Capital Inc. (www.InvestSafe.com). On July 1, 2005 interest rates on student loans are scheduled to jump by almost 2% - which represents the largest single-year increase in 40 years of the federal student loan program.
Starting July 1, the interest rate on Stafford loans issued on or after July 1, 1998 for borrowers who are in school will increase to 4.7% from 2.77%, and the rate for borrowers in repayment will jump to 5.3% from 3.37%. For Parent Loans for Undergraduate Students (PLUS) loans issued on or after July 1, 1998, the interest rate will increase to 6.1% from 4.17%. These new interest rates will be reset each year thereafter to reflect market conditions.
Borrowers who have more than one federal student loan can avoid paying the new higher rates by consolidating their loans into a fixed interest loan. Under the federal loan consolidation program, you can consolidate your various federal education loans one time into a single new loan with a fixed interest rate. That fixed rate loan will be set at the weighted average of the rates of your consolidated loans, rounded upwards to the nearest 0.125%. By applying for a consolidation before July 1, 2005 you can lock in a consolidated fixed rate for the duration of your repayment term that's based on the current Stafford and PLUS loan rates, not the higher rates that take effect on July 1.
Lamaute Capital, Inc. (InvestSafe.com) - Providing financial information to keep you ahead. Lamaute Capital is an investment brokerage firm that specializes in retirement plans.
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