This year, no rush to combine college loans
Monday, May 19th, 2008This year, instead of scrambling to consolidate student loans by July 1, the smart money is on waiting until after that date — because interest rates are expected to drop. - advertisement -
The catch: Fewer lenders are offering loan consolidation.
Every July 1, interest rates reset for the year for variable rate Stafford loans for students and PLUS loans for parents. Stafford and PLUS loans made after July 1, 2006 are at fixed rates and not subject to consolidation.
Interest rates on the older loans are tied to the interest on three-month Treasury bills based on the last auction in May. Until this year, interest rates have risen every year.