There roughly are seven weeks remaining until interest rates on student loans are expected to greatly increase and rules and regulations will change. College and graduate students alike will feel a major pinch unless they now take action to consolidate their student loans.

Students throughout the country will feel considerable negative effects due to the passing Feb. 8 of the Deficit Reduction Act of 2005, S. 1932. Although many entities are finding fault with the legislation and others are seeking to challenge the bill, interest rates on student loans are poised to skyrocket on July 1.

Federal programs such as Medicare and Medicaid were cut with the passing of the Deficit Reduction Act. However, the federal student loan program took the deepest cuts, totaling more than $12 billion, leaving the nation’s students, parents and student loan companies outraged.

College More Expensive Than Ever

It is highly probable that students will face paying thousands more for their student loans because of the passing of the Deficit Reduction Act. Working-class and middle-class families that already have difficulty paying for higher education will be hit hardest. Tuition at universities and colleges throughout the country has been on the rise while the availability for student grants has decreased, making a college education less attainable.

Students who have federal loans, including PLUS and Stafford loans, can help ease their situations through student loan consolidation. By consolidating federal student loans before July 1 students easily can lock in a lower interest rate for the life of the loan. Through consolidation, students do not have to worry about a variety of monthly bills, as the program combines all of a student’s loans into one monthly payment. In addition, with student loan consolidation students can save as much as 60 percent, which can add up to a savings of thousands in the long run.

As the nation strives to be more globally competitive, the cost of college tuition is increasing. As costs increase and negative changes in the federal student loan program take hold, more and more students and families find it is more difficult to attend college. The rising cost of living is no help to graduates who find it difficult to pay back their student loans.

Student Loan Consolidation Can Save the Day

Student loan consolidation can be a big help to those students and graduates already weighed down under the heavy burden of college debt. However, with the looming July 1 rate increase scheduled to take effect, students should take action and consolidate their student loans before the deadline.

NextStudent believes that getting an education is the best investment you can make, and it is dedicated to helping you pursue your education dreams by making college funding as easy as possible. Learn more about student loans at http://www.nextstudent.com/.

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Student loan borrowers in less than three weeks will come face to face with new legislation changing rules and regulations and increasing interest rates affecting federal student loans. Most notable is that federal student loan interest rates on
July 1, 2006 will increase 1.84 percentage points, the second-largest interest rate hike in the history of the program.

Upon the news of the rate increase, announced at the May 30, 2006 auction of 91-day Treasury bills, student borrowers have been rushing to find the best consolidation rates for their loans.

According to NextStudent, the premier education funding company based in Phoenix, student loan consolidation, especially now before July 1, helps borrowers combine their numerous loans into one and offers one low interest rate. Along with NextStudent’s low interest rates, its reputation for top-quality, personalized service is unsurpassed within the industry of student loans.

In-School Consolidation Available

Student loan borrowers should be aware that between now and July 1, 2006 the U.S. Department of Education is allowing for in-school consolidation, at the discretion of the original lender. After July 1 in-school consolidation no longer will be available. Although there are three or four lenders who do not partake in the process, NextStudent is among the lenders that actively help current students consolidate their student loans, a process whereby the original lender releases loans to other lenders and allows borrowers to consolidate.

NextStudent now offers an in-school consolidation fixed rate that most often is available at 4.7 percent, and can be as low as 2.5 percent in some cases. After July 1 the in-school consolidation fixed rate can go as high as 7.25 percent.

Allay Fears about In-School Consolidation

Many students have unwarranted fears regarding in-school consolidation. Through the program student borrowers must sign a waiver to give up their grace period – the six-month time frame following graduation that allows for deferment of student loans. The waiver then puts the in-school loans into an immediate repayment status. The biggest fear of students is they think they have to make payments while they are in school.

However, it is important to understand the actual facts regarding in-school consolidation. Following the completion of an in-school consolidation, which takes up to six weeks, a student borrower’s loans revert back to an in-school deferment; therefore, payments do not have to be made until after graduation. An added benefit is that borrowers who graduate have up to six years to defer their payment.

Along with the expected in-school consolidation interest rate hikes taking effect July 1, other interest rates also will increase. Stafford loans disbursed on or after July 1, 2006 will have a new fixed rate of 6.8 percent. PLUS loans disbursed on or after July 1, 2006 will have a new fixed rate of 8.5 percent.

NextStudent Offers Other Low Rates

NextStudent offers other low consolidation rates to borrowers who consolidate before the July 1, 2006 deadline. A 2.5 percent interest rate is available to eligible borrowers, with applied benefits, including .60 percent reduction for students who consolidate after graduation; a .25 percent reduction for borrowers who use Auto Debit; and an added 1 percent reduction for students who make 36 consecutive on-time payments.

Through the consolidation program interest rates are locked for the loan’s life, payment terms can be extended and thousands saved over the long term. NextStudent offers aggressive discounts and benefits while it brings to students a long-established reputation as a company specifically geared toward borrowers’ needs.

With less than three weeks remaining for all consolidations at low interest rates, it is important to rein in outstanding student loans with high interest rates to receive the best possible rate available, according to NextStudent. After July 1, students no longer will be able to receive the low rates now available.

NextStudent believes that getting an education is the best investment you can make, and it is dedicated to helping you pursue your education dreams by making college funding as easy as possible. Learn more about Student Loans at http://www.nextstudent.com

Stay Current with our Student Loan Articles

NextStudent is proud to annouce that we now provide newsfeeds for our student loan articles and for NextPath, our free financial aid newsletter. You can use the RSS feed below to add this to your "MyYahoo" account, your blogs, newstickers, and other channels that accept distributable content.

View the original article here

Students can Lock in Lower Interest Rates on Student Loan Consolidation Before July 1 Deadline

In a little more than six weeks the interest rate on federal student loans is expected to increase. Recently short-term interest rates increased by 25 basis points, and the new target rate for federal funds is 5 percent. With the anticipated rate hikes so close, student loan consolidation is advisable for student borrowers who want to lock in rates before the July 1 deadline.

Every July 1 federal interest rates change for federal student loans according to the 91-day Treasury bill affecting Stafford loans and the 1-year Treasury bill that affects PLUS loans.

Rate Increase Expected

Although exact rate information will not be available until May 30, the following increased rates are expected on July 1: A 7.3 percent rate on Stafford loan repayment on loans made since July 1998; a 6.7 percent rate for in-school, grace and deferments; and an 8.1 percent rate on PLUS loans.

The rate increases coupled with the new rules and regulations brought forth by the passing in February of the Deficit Reduction Act of 2005, S. 1932, are poised to negatively effect the federal student loan program, most notably the rules for consolidation. The legislation includes $12.7 billion in cuts to the federal student loan program.

Student Loan Consolidation Still Available

Students still have time to take advantage of federal student loan consolidation, which bundles together all of a student’s loans into one monthly payment at a rate that is locked for the loan’s full term. Through student loan consolidation, students also are able to extend the repayment period on their loans, which saves thousands over time.

Through NextStudent, a premier education funding company based in Phoenix, student loan borrowers can save as much as 60 percent through consolidation. The company’s offerings include a 4.75 percent interest rate for in-school borrowers. A 2.5 percent interest rate is offered to qualified borrowers when benefits are applied, including a .60 percent in savings for consolidation after graduation, a .25 percent rate reduction when students choose Auto Debit, and an additional 1 percent reduction after 36 consecutive on-time payments.

College Becoming More Expensive

As the cost of a higher education increases along with interest rates, consolidation could be the answer for students with heavy student loan debt, especially those students from low-income and middle-income families finding it more difficult to pay for college in the first place. Graduates who consolidate can use their savings to put toward the necessities of their new lives, including rent and bills, instead of trying to pay off a variety of loans with high interest rates.

Students should keep the July 1 deadline in mind and take steps now to make their lives easier through consolidation. It is important to lock in a low rate before the increase takes effect and low rates no longer are available.

NextStudent believes that getting an education is the best investment you can make, and it is dedicated to helping you pursue your education dreams by making college funding as easy as possible. Learn more about Student Loans at http://www.nextstudent.com/.

Stay Current with our Student Loan Articles

NextStudent is proud to annouce that we now provide newsfeeds for our student loan articles and for NextPath, our free financial aid newsletter. You can use the RSS feed below to add this to your "MyYahoo" account, your blogs, newstickers, and other channels that accept distributable content.

View the original article here