By: Richard Meeuwsen
Act now to save. Unfortunately, that statement will be the norm,
for a long time to come. Every July 1st, federal student loan
interest rates are adjusted. Unless a downturn occurs, we will
all be faced with higher interest rates.
Usually the actual rate of interest is not known until May 30th.
The rate varies annually according to 91 day treasury bills for
Stafford loans and the 1 year Treasury bills for PLUS loans. It
makes sense that if the Governments interest costs are going up,
that they will pass on those increased costs.
There is still a little good news though. Students can
consolidate their loans. They can lock in the current rate for
the life of their loan. That could potentially save you
thousands of dollars in interest costs.
If your decision is to consolidate your loans to save money, be
sure you shop around. Not all student consolidation loans are
the same. You can take a look at some competing offers at the
http://www.equityfoundation
page.
Besides looking at the new monthly payment, a better number to
look at would be the APR. The annual percentage rate for your
loan will determine your actual savings. Do not be tempted by
the allure of a lower monthly payment if the interest rate is
higher. You will end up paying more over the life of the loan.
Once you have reviewed the various rates and gotten the best
deal possible, you can then go ahead and practice what you have
learned in school. You have invested a lot of time and effort
into your education, so get out there!
