Interest Rates on Federal Education Loans to Drop July 1

Save By Consolidating Federal Student Loans after July 1st:

*The new rates only apply to federal loans with a variable interest rate. The rates for 2009-2010 are the lowest in history for federal student loans.

Lock in these rates by consolidating after July 1, 2009:

• Stafford Loan Consolidation (In-School/Grace Period): 2.00%
• Stafford Loan Consolidation (Repayment Period): 2.50%
• PLUS Loan Consolidation: 3.38%

Some Exclusions Apply:

• If you have already consolidated your loans, you are ineligible.
  
• If the loans originated after July 1, 2006, they are not eligible for the new lower rate.
• Private student loans cannot be included in a federal consolidation loan.
• If you are still in school, you cannot consolidate until after you graduate.
  
• There is no requirement that a borrower who consolidates his or her loans switch from standard ten-year repayment to a longer repayment plan, such as extended repayment or the new income-based repayment plan. Some borrowers may choose to use extended repayment to maximize the term of the historically low interest rate. However, if they do so, they should use the reduction in the monthly payment to pay down more expensive debt. Otherwise they are merely increasing the amount of interest they will pay over the life of the loan.

For more information, read the article at FastWeb here