Tuesday, April 18, 2006

Federal Student Loan Consolidation…

Today I will be attending a financial aid seminar at school dealing with federal loan consolidation. Once again, the rising interest rates are hitting the little man trying to make a better life for themselves and their families. The cost of higher education is just ridiculous.

I have to once again consolidate my student loans by June 1st to lock in a low rate of approximately 4.75%. After that, interest rates are rising to 6.8% for new Stafford loans and 8.5% for Plus loans. Ouch!!! I wonder how long student loan debt will be considered good debt if the interest rates are so high. Yahoo! had an article on it today. See here.

Unfortunately for me, I need to borrow for my last year of school and will not be able to consolidate those loans before the June 1st deadline. Therefore, I will have to borrower at the higher rate. Bummer. I also won’t be consolidating the last year of federal loans because they take a weighted average approach in fixing the interest rate. All in all, I will have about $55,000 fixed at approximately 4% and the rest of my student loan debt will have higher interest rates. Total Bummer but more incentive to pay the loans off quicker.

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