Consolidating Federal Student Loans before July 1st

I hear interest rates are going up on July first by two percent for Federal Student Loans. I have consolidated before however I wonder how much it will help me to re-consolidate. I ask this "tongue-and-cheek", because I am somewhat screwed with three variable interest private student loans. I do have other Federal Studen Loans, but I wonder though, if it is just a scam....

Are banks trying to ween folks out of protections Federal Student Loans offer. Such as a ceiling on interest rates? Anybody have any other info concerning this most recent rate hike, please add you info here. I may reconsolidate this evening, but would like to see if anybody else has any other info. I am very skeptical anytime people call me offering any "DEAL". When they say reconsolidating will help me, I almost automatically assume they are trying to screw me.

...you may have already locked in the lower rate. Therefore, no need to consolidate. Check your paperwork.

I believe I have... but, I should make sure.

his/her student loans once. If this is true, and a student has more loans to take out in the coming year(s), how will comsolidating now affect their loan structure/management in the future?

that we were SOL on next year's loans -- I mean, that we had to take them at a higher interest rate and "like it" (please sir, may I have another?).

Is that not the case?

My understanding is that the rates are going up by 1.84% on July 1, 2006, and consolidation locks in at something or another. My after consolidation rate was 5.3% from 5.375% before.

I don't think it's a scam, but I really haven't studied it closely.

and they were talking about this on campus. It is the federal government making a rate hike. Peace, Kim

on those that can not consolidate before July 1st. Bush and his buddies are making it harder for the middle class and lower to go to school. MMM... good jobs in the army. Peace, Kim

but with the government loans, the interest rate is tied to T-bills, whose interest rate is going up a couple of percent. Therefore, your interest rate on any government loans you hold will also go up a couple of percent (mine would have gone from 4.25% to 6.25%, for example).

Don't know if this is the case if you consolidated last year, but I'd give the Direct Loans folks a holler and see whether or not it's so. It would suck to get more interest tacked on from not finding out what the real deal was in time.

You'd have to check if you can consolidate your private loans with your government loans (go to www.ed.gov), but my university's financial aid office said that going through Direct Loans (the government) was the best deal WRT interest, so that's what I did. I don't have any bank loans, but it wouldn't hurt to check if you can consolidate yours with your government loans.

If you have any Perkins or HHS loans, consolidating will eliminate any forgiveness-in-exchange-for-service options and the extended grace period on repayment. If you're still in school, you still get the six months post-graduation grace period before you have to start to repay; with some of the private consolidators you have to start repaying within 60 days of graduation.

I'll repeat: if you don't consolidate your loans, you'll have a minimum 2% interest rate hike. Don't know how long you have on repayment, but consolidating can be the difference between 20 and 30 percent above principal.

The scam, IMNSHO, is that they're trying to jack up interest rates as much as they are. Student loans are supposed to be there as a low-interest way to help you get an education you need to better yourself, not to be a lifelong boat anchor that forces people to skip school and work at Wal-Mart for the rest of their lives.

HTH.

My daughter will be a college freshman in the fall. She hasn't signed the papers for her loan yet. Does she need to do this before July 1st to get a lower rate?

TIA

at her university. They will be able to answer any questions you have (and, in my experience at 3 different unis, tend to be quite nice). I'm sure they're getting lots of calls about this right now, and should have the answers right at hand.

My guess is that when she signs for next year's loans (I'm assuming these are student, not parent, loans) doesn't matter, as next year's loans can't be consolidated with last year's. I could be wrong, though. The financial aid folks will know for sure. Also check www.ed.gov since they have quite a bit of info there (although it does tend to be a bit confusing).

I have 2 years of loans that I could consolidate, but next year's loans weren't allowed to be included in the whole consolidation foo-fa-raw. I'm a grad student, so I get a wee stipend; I'm hoping that since I don't have moving expenses and whatnot this year (I moved cross-country last year) that I can immediately pay back the bigger loan (assuming this will work out with my budget) and only take the smaller one as "emergency" money.

Quick aside: if she has any Ford loans, and either you or she is able to, pay the interest as it accrues rather than waiting until she's out of school. It will save you a bundle.

Edit: punctuation

I will call her school and inquire.

No Ford loan, but a small Perkins. It's my daughter's plan as well to be in a position to pay her loan(s?) back quickly upon graduation.

Good luck with grad school and paying back those loans quickly too - sounds like a good plan :-)