The Federal student loan program has benefited thousands of college students in the forty years since it was introduced. Interest rates for the program have historically been quite competitive, and the program has allowed many people to acquire a college education who otherwise might not have been able to afford one.
At the moment, interest rates on Federal student loans are the lowest in history, but that is about to change. On July 1, 2005, the interest rates on Federal student loans will rise, due to an increase in the price of Treasury, bills, to which the interest rates on student loans are tied.
While an increase in interest rates is seldom viewed as a good thing, knowing about it ahead of can be helpful. Between now and June 30, new graduates or those who have been repaying existing loans can consolidate their student loans at current rates. The rates currently vary, with fixed rates being slightly higher than adjustable rates. Those considering consolidation might wish to convert their loan to a fixed rate. Depending on the amount of the loan, borrowers may extend their loan terms to as long as 30 years.
There is also legislation pending in Congress that would change the Federal loan system so that all future loans are adjustable rate, with no fixed rate option. This will save the government money by not allowing students to lock in long-term loans at low rates during times of increasing interest rates. Students who wish to obtain a fixed rate loan may not have much longer to do so.
Rates will vary slightly from lender to lender, and the market for loan consolidation is quite competitive. Those wishing to consolidate their loans should consider shopping around for the best deal while time permits.
By: Charles Essmeier
Posts Tagged ‘College Education’
Debt Consolidation – Consolidate Your Student Loans Now!
February 4th, 2010Consolidate Your Government Student Loans
January 17th, 2010
One of the biggest burdens faced by today’s students is the repayment of expensive student loans. In a day where room, board, tuition, and books can push college bills up past 20, 30, even 40 thousand dollars per year, many students are finding themselves in serious debt upon leaving college. Even with a good job lined up, you may find that you will be repaying your loans well after leaving school, after you are married, and still be paying your student loan off as your children get ready for their college education! Who needs that? You certainly don’t! There may be a way for you to tackle your student loan debt in the form of a government student loan consolidation. Please keep reading for more details.
So, just what is a government student loan consolidation anyway? For starters, it is a type of loan which permits you to take several student loans, pay them off, and make monthly payments to a single lender. For example, if you have 3 outstanding loans with 3 different lenders that are due at 3 different times of the month, you may feel as if you are writing out checks just about every week. In fact, you probably are! Who needs that? You have enough to think about such as managing your hectic schedule; balancing work, family, friends, and the rest of life’s tasks is enough for any one person to handle — wouldn’t it be simpler to pay a single payment each month? You bet it would!
Just where can you go to find yourself a government student loan consolidation? By searching online. Companies advertise their services to consumers and they are eager to do business with you. By shopping the internet you can locate the government student loan consolidation that is right for you. Please keep the following points in mind before selecting your loan:
Loan Rate. Will the loan be given to you at a fixed rate or at a variable rate? Can you lock in a long term fixed rate to make certain that your rate never rises?
Loan Amount. Exactly how much will the consolidator lend to you? Will the amount loaned cover the entire outstanding balance or will you have to pay the remaining funds off with a separate loan? Can you afford to do both?
Loan Term. How long will your loan take to be paid off? Will you be satisfied with making payments years after leaving college and with other responsibilities on your shoulders, i.e., new car loan, your marriage, a family, buying a home? Are there prepayment penalties if you decide to pay off your loan early?
Government student loan consolidations are fairly new and not for everyone. Make certain you understand all the “fine print” before agreeing to a new loan. You can reduce your debt to manageable levels with a government student loan consolidation if you shop wisely.
By: Matthew Keegan
Why You Should Consolidate Your Student Loan Debt
January 10th, 2010
Do you have student loan debt? If you graduated from school, chances are you took out loans to afford it. School isn’t cheap, even more if you go to a private school and stay on campus. Add together room and board, plus tuition and fees, plus other expenses and you get an expensive college education. Multiply it by at least 4 years and you get a pretty hefty student loan.
After you have graduated from your university and have these student loans, you may run into a problem. Maybe you don’t get a job as soon as you need to or it’s not as high-paying as you thought it would be. If this happens, you might find yourself having trouble paying off the debt. What happens next?
Consolidation of your loans could be the right choice. Mostly likely you have both federal student loans and private student loans. If you can consolidate these loans, the consolidated loans could have a lower rate of interest, and you can usually get a smaller monthly payment which lets you pay the payments more easily.
Most of the time, you can consolidate federal and private loans separately. Federal loans often have a much lower interest rate than private loans. When you can decrease your debt into one or two low payments, you will be able to manage your money easier and afford your life more easily.
Ultimately, don’t put off paying back your student loans for too much time. The sooner you pay them back, the less amount you’ll pay in interest, and the sooner you can move onto other more important goals such as saving for a house, car, etc. Build an efficient budget and financial plan to move further in your financial life after college.
By: Samantha Asher