It’s time again for everybody’s favorite game show, Let’s Raise Student Loan Interest Rates! I’m your host, Guy Smiley.
At the end of last year, Congress announced that student loan interest rates would increase on July 1, 2006. That day is quickly approaching. The increase is going to be significant. Stafford Loans will have an interest rate of 7.3% or 6.7% depending on when the student begins paying off the loan and PLUS Loans for parents will increase to 8.1%. Are you ready for the increase?
This year, I intend on getting a head start. My loan servicing company will consolidate my student loans on the last day possible, June 30, in order to minimize my interest liability.
There are a lot of companies out there who will try to pick you up from your current loan servicer. I get junk mail every month from at least two independent loan companies trying to convince me to consolidate my loan with them. Their mailings look official and include wording such as, “Please call us immediately regarding your student loan.”
Don’t fall for this. The best bet is to go with whichever company is servicing your current student loans. If you already deal with more than one company, shop around and find one who won’t charge a fee.
Updated January 16, 2010 and originally published May 22, 2006. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.