Student Loan Interest Rates Will Increase July 1; NextStudent Urges Students to Consolidate
Student Loan Interest Rates Will Increase July 1; NextStudent Urges Students to Consolidate
Federal student loans (http://www.nextstudent.com) in less than four weeks will face the second-largest interest rate increase in the history of the program. Student borrowers anticipating the 1.84 percentage point increase that will take effect on July 1, 2006, are looking to consolidate their loans in order to avoid the rate increase.
By consolidating federal student loans, student borrowers can combine their numerous loans into one and receive a host of incentives and benefits, according to Phoenix-based NextStudent, a premier education funding company, which provides an unparalleled program offering low interest rates coupled with first-rate customer service.
Stafford and PLUS Loan Increases
If student borrowers consolidate now they will avoid some of the forthcoming increased interest rates that will take hold on July 1: A 6.8 percent fixed rate for Stafford loans disbursed on or after July 1, 2006, and an 8.5 percent fixed rate for PLUS loans disbursed on or after July 1, 2006.
When a student has various student loans with differing high interest rates, consolidation not only combines the loans into one with a much lower interest rate, it also locks the loan for its duration. Payment terms can be extended and thousands of dollars can be saved over the long run.
NextStudent’s Consolidation Rates, Benefits
NextStudent offers a 4.75 percent interest rate for in-school borrowers who qualify. In addition a 2.75 percent rate is offered to eligible borrowers, with benefits applied. These first-rate benefits include a .25 percent rate reduction with use of Auto Debit; .60 percent reduction when borrowers consolidate after graduation; and an additional 1 percent reduction for making 36 consecutive on-time payments.
There are many other lenders out there, and many recently appeared because of the impending rate increase. These fly-by-night companies will not be around long enough to stand by their benefits and incentives. Therefore, it is imperative that borrowers beware and look for quality and reputation when consolidating, according to NextStudent.
When borrowers choose NextStudent they also receive the benefits of an established company that is geared toward borrowers’ concerns and needs. Borrowers speak one-on-one with qualified, caring education finance advisers who specialize in consolidation and all facets of the student loan industry.
Feel Secure with NextStudent
The student loan consolidation (http://www.nextstudent.com/consolidation_loans/consolidation_loans.asp) program offered through NextStudent is easy and federal student loan consolidation is a free government program. With NextStudent borrowers are at ease because all their information is completely secure and confidential. In addition, there are no hidden charges, fees or prepayment penalties.
According to Chris Hooley, NextStudent’s Director of Web Marketing, “We do for our borrowers what the bigger companies won’t, and what the smaller companies can’t. We model our company around the needs of the borrower, not based on what is most profitable, which is why we have so many discount packages and ways to save borrowers money.”
The interest rate increases on federal student loans are due to the May 30, 2006 announcement of the auction of 91-day Treasury bills. The increases are a direct result of the Deficit Reduction Act of 2005, S. 1932, that was signed into law in February by President Bush. The legislation is responsible for the $12.7 billion in cuts to the federal student loan program
College costs are rising every day along with the upcoming interest rates. Student borrowers who want to consolidate are running out of time, as the July 1, 2006 deadline literally is around the corner. Students who want to ease their financial burdens and save money should consolidate before it is too late.
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 and student consolidation loans (http://www.nextstudent.com) at http://www.nextstudent.com/.
About the Author
Jeff Mictabor is an enthusiast on the topic of student loan issues in the news. He has been writing for the past 10 years for a variety of education publications. He now offers his writing services on a freelance basis.
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