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Congressman Doyle Urges Constituents with Student Loans
to
Think about Consolidating Their Student Loans…NOW!
WASHINGTON - June 23, 2005 - U.S. Representative Mike Doyle (PA-14) announced today that for the next week, college graduates and people currently in college have an opportunity to consolidate their student loans at historically low fixed interest rates.
“Individuals who act over the next week to lock in the current interest rate on their consolidation loans could save themselves hundreds – and possibly thousands of dollars,” Congressman Doyle said today. “I urge college students and graduates who are still paying off their student loans to look carefully at the pros and cons of consolidating their students loans prior to the July 1st deadline.”
Every year at this time, the federal government adjusts student loan consolidation loan rates. These interest rates will increase dramatically on July 1st, and borrowers can save thousands of dollars in interest costs if they lock in the existing consolidation loan rate by then.
Students currently in school can consolidate their current student loans and lock in an interest rate of 2.77 percent, although they may have to forgo the 6-month grace period in order to do so. Those who consolidate after their grace period can lock in a rate of 3.37 percent. Parents with federal PLUS loans can consolidate and lock in a rate of 4.17 percent.
After July 1st, interest rates will increase by 1.93 percentage points – the largest annual increase since 1980. An average undergraduate borrower, with $19,000 in student loans, will incur nearly $2,100 in increased interest payments on a ten year loan repayment plan if he or she chooses to consolidate after July 1st. Many people with student loans may want to seize this opportunity to consolidate their student loans before the rates increase dramatically.
Below are several web sites which provide further information on student loan consolidation.
American Association of State Colleges and Universities: http://www.aascu.org/policy/alerts_05/052005a.htm
State Public Interest Research Groups Higher Education Project:
http://www.pirg.org/consolidation/
U.S. Department of Education: http://www.loanconsolidation.ed.gov
or 1-800-557-7392