In February, 2006, our glorious president
of the United States created a budget reconciliation
bill that impacts student loans. The interest
rate on any new
student loans that you take out after
July 1, 2006 will be fixed at 6.8%. Any student
loans you have taken out prior to that date
will remain at a variable rate. Origination
fees on student loans are scheduled to phase
out over the next several years, which means
fewer fees on student loans. The average new
graduate will owe over two hundred dollars
in student loan payments each month.
Even if you have not received your first student
loan payment yet, you should consider that
there are important deadlines approaching.
You can save hundreds or thousands of dollars
in interest by consolidating now because the
interest rate on your student
loans will increase in July. If you are
pursuing a graduate degree, a new PLUS Loan
initiative will allow graduate and professional
students to take advantage of PLUS funds.
This will enable you to cover your total cost
of attendance with federally guaranteed, low-interest
loans instead of Alternative Loans, which
are typically more costly.
You are probably thinking about consolidating
your student loans through the Federal Loan
Consolidation Program to lower your monthly
payments up to fifty percent. The tips provided
below would help you to deal with questions
you may have concerning graduation and how
to handle your student loans. In addition,
it is recommended that you lock in now while
rates are still low. As the pattern of rising
interest rates continues, your rate and monthly
payment will go up if you do not consolidate
soon. How you manage your student loans can
have a big impact on your financial future.
Make sure that you choose the best
payment option for you. Multiple payment
options are available to student loan borrowers
who consolidate. A payment plan that fits
your current financial situation can help
you keep up with your loans.
Make sure that you do not get behind on your
payments. If you are having trouble making
your student loan payments, you should immediately
contact your broker to find out if you are
eligible for deferment or forbearance. Just
as with any other loans, late student loan
payments will negatively affect your credit.
Keep in mind that it is not a good idea to
let your interest rate go up. Student loan
interest rates are variable. You can permanently
lock in your interest rate by consolidating
now. It is also a good idea to use automatic
payments. Most lenders offer a reduced interest
rate when your student loan payments are deducted
from your checking or savings account.
