Student Loan Consolidation Lowdown

The rules for college loans have changed and how. As of July 1, new Stafford loans are fixed at 6.8 percent and new PLUS loans will be 8.5 percent, a benefit if interest rates continue to rise. Variable rates on loans issued before that date, that have not been consolidated will be reset once a year. Dfw.com reports:

Before, freshmen could borrow up to $2,625 in Stafford funds. The new limit will be $3,500 starting July 1, 2007. Caps for sophomores will go from $2,500 to $4,500, and graduate and professional students will be able to borrow $12,000 a year instead of $10,000.

Read more: Student loan lessons

Although students are always preached to be up on toes and be alert but in the loan economics, delaying things might turn out to be a healthy proposition. Those who were still to go for a locking of their fixed rates for their educational loans before this June end deadline were gifted with a chance to save a little more money. It came about as a result of a provision buried in a bill providing extra defense funding, which allowed student borrowers of federally guaranteed loans from only one lender to shop around for the best deal. Similar to this, many such incidents take place.

Speculation could be paid some heed and having some information from the market gives fair indication about kind of provision might take a change. Keeping a tab on the market forces helps too but most importantly, following your intuition to be laid back sometimes do help. Keep you finger crossed!

Students had this problem of not having a voice when it comes to selecting a good lender of their choice for consolidation of their loan with the single-lender rule. But, not anymore, as students can pick and choose, yet for a definite period.

President Bush, did some good for the students by signing into law - the emergency supplemental spending package. According to the decision taken, students’ borrowings can be consolidated — their federal student loans with the lender of their choice at low interest rates.

In order to take advantage of the low interest rates, student borrowers are now being urged to consolidate quickly. The reasoning for this is that well-established company offers low rates and unmatched benefits and incentives to all student borrowers. By consolidating soon, student borrowers will avoid an interest rate hike. This was surely a way to give some amount of choice to the student community, which was for long denied this privilege in the market driven era.