Students get OK to consolidate loans before interest rates rise

A quiet announcement by the Department of Education this week could translate into thousands of dollars of savings for student borrowers by allowing them to consolidate their loans before rates go up July 1.

The announcement applies to students with government-backed Stafford loans from banks or commercial lenders. Students who borrow directly from the government have always been free to consolidate while still enrolled, but until this week, it was unclear whether borrowers from commercial lenders could, too.

The discrepancy was no big deal in the past because students were in no rush to consolidate loans. Interest rates were falling, and the price of consolidating -- students must forfeit a six-month grace period after graduation before repayment is required -- wasn't worth it.

This year, however, interest rates for students still in school are expected to rise from the current 2.77 percent to as much as 5 percent when the new rates are announced July 1. By consolidating, students will still forfeit the grace period, but some may save thousands of dollars by locking in the lower rates.

link

I have some student loans (been out for a while) that are eligible for consolidation. Should definitely do it ASAP before the interest rates rise.

There are a bunch of companies/banks that do this. Has anyone had a good experience? Not clear to me how to choose so a recommendation from someone would help a lot.

Also, I have a little less than 8K remaining. Is this enough to interest a lender in consolidating?

They might as well go straight to that.

Got a full ride at a top state university.

This is what I feared when making college decisions.

I don't want to be paying off loans until I'm retired.

whether, once I've consolidated with the feds, can I reconsolidate? I am paying 8% interest and it just doesn't seem fair.

in the Chronicle of Higher Education, but since all of their content is only available to paid subscribers, I didn't post the link. It is nice to see that the MSM is also picking up on this so those not currently in higher ed will get the message.