Student loan rates dropping
June 9, 2008, 10:34 am
Filed under: College, Money Basics

Thanks to the failing economy, as of July 1st, federal student loan interest rates will drop over three percentage points. This will be the biggest one year drop in the Stafford loan program’s history. For Stafford loans in the grace period, rates will be 3.61% and for Stafford loans in repayment, rates will be 4.21%. For those of us with multiple student loans, now would be a great time to consolidate.

I have my student loans through Sallie Mae, who, interestingly enough, has stopped their federal consolidation program. I guess they feel like they would lose too much money if they continued to offer the program through this economic rough patch. The government’s Federal Direct Consolidation Loan program, however, is still going strong.

Three of my loans are at 6.8% and the other two are at 4.875%, so reconsolidating them would save me a good chunk of change over the life of the loans. I need to look into the Federal Direct program a bit more closely to see how my monthly payment would change and if they offer payment options.

Are you planning to consolidate your student loans?