Question: I'm still in college and have about two years to go. Should I refinance the student loans I already have even though I will be getting other loans to finish school? Answer: Yes, by all means consolidate your loans right away.
SAN DIEGO, April 4 /U.S. Newswire/ -- In the next three months the average student loan borrower has an opportunity to save nearly $3,000 by consolidating before upcoming rate increases. Interest rates on federal student loans have been at historic lows for the past few years, but that trend is about to change. On July 1, interest rates are set to increase significantly. Students, parents and graduates must act now to avoid rate hikes by consolidating their loans and locking in a fixed rate as low as 4.50 percent (see note 1) for the duration of repayment. In addition to major interest rate savings, borrowers can also reduce their monthly payments and secure additional benefits, such as an interest rate reduction, cash-back rebates and the convenience of a single monthly payment.
Interest rates on federal student loans will increase nearly two points July 1 and college students stand to save thousands by consolidating Stafford loan debt now. But with final exams and graduation at hand, debt refinancing is probably the last thing students are thinking about.
All good things come to an end, and that might be true in July when historically low interest rates on student loans are readjusted. If current trends continue, the new rates on federal student loans could go up nearly 2 percentage points, some lenders say. It would be the first increase in five years.
President needs to help struggling middle class The media are reporting that the national student loan debt exceeds the national credit card debt, causing President Obama to unveil a plan aimed at reducing the student loan debt. His plan allows borrowers to consolidate their government loans and government-backed private loans into one monthly payment, at a lower interest rate. His plan will also give borrowers the right to cap their loan payments at 10 percent of their income, and will allow student debt to be forgiven after 20 years. Student loan debt cannot be reduced by filing bankruptcy.
Myth: If I consolidate my student loans, I'll end up paying more interest in the long run. Myth: I can't consolidate my loans because I'm still in my grace period. Fact: The best time to consolidate your student loans is during your grace period because you will get an additional 6-percent rate reduction off of all-time low interest rates. When you consolidate during your grace period, you can retain all your grace-period benefits.
Allow refinancing of student loans It is my understanding that the current rate at which a graduate may consolidate his or her student loans is between 3 percent to 4 percent. I understand that interest rates fluctuate with the economy. However, hundreds of thousands of other graduates and I are "locked in" at rates around 7 percent to 9 percent, far greater than the current consolidation rates.
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