College students might soon feel a pinch in their wallets as federal
student loan rates increase about 57 percent this summer, and they
might want to consider options such as loan consolidation.
According to the Web site collegeboard.com, about 9.6 million
undergraduate college students received financial aid in the form of
student loans in the 2003-04 school year, and the number of those
taking advantage of student loan opportunities has been steadily
increasing during the last 10 years.
Currently, the loan rate is 3.37 percent. Each year, the U.S.
Treasury sets the loan rate based on a statutory formula. Effective
July 1, the rate will increase to 5.30 percent. This might have some
students with more than one loan thinking about loan consolidation
while the current rate is in place.
Sue Sims, coordinator of financial aid at University of South
Carolina Sumter, said that although rates are on the rise, most
students will probably continue taking out loans.
"I think they'll wait till they get out of school," Sims said. "I don't think
they really concern themselves with it until graduation."
ALL Student Loan, based in Los Angeles, is one of many
organizations helping students across the nation consolidate their
loan payments. Marketing and communications associate Aran
Richardson said there are a "number of benefits" from choosing to
consolidate.
Probably the largest benefit is that by choosing to consolidate, a
student can lower their monthly payment by as much as 50 percent
with an extension of the loan term. Another perk is a fixed rate. "If
they consolidate, they can lock in a fixed interest rate," Richardson
said.
Richardson said that since loan rates are currently at a historical low
and will be until the increase occurs in July students should
consider the possibility of loan consolidation.
Sims said most students are generally aware of rates at any given
time, and regardless if they are high or low, if they need a loan, they
will do what they need to do to get one. Many never consider the
option of consolidation.
According to Sims, only students with several loans need to concern
themselves with thinking about consolidation. At USC Sumter, many
students have Stafford and Perkins federal loans. Some of those
who have both look to consolidation to reduce their interest rate
payments.
Sims said it is uncommon for students at USC Sumter to amass
student loan debt to a degree that they feel it is insurmountable.
"I know that they can borrow upwards of $50,000, but it's rare we
see anyone hit that point," she said.
The individuals who often acquire the most student loan debt are
those who return to school after already having attended once,
according to Sims.
By MARY DOLAN
Education Reporter
Mdolan@theitem.com
Source : www.allstudentloan.org
student loan rates increase about 57 percent this summer, and they
might want to consider options such as loan consolidation.
According to the Web site collegeboard.com, about 9.6 million
undergraduate college students received financial aid in the form of
student loans in the 2003-04 school year, and the number of those
taking advantage of student loan opportunities has been steadily
increasing during the last 10 years.
Currently, the loan rate is 3.37 percent. Each year, the U.S.
Treasury sets the loan rate based on a statutory formula. Effective
July 1, the rate will increase to 5.30 percent. This might have some
students with more than one loan thinking about loan consolidation
while the current rate is in place.
Sue Sims, coordinator of financial aid at University of South
Carolina Sumter, said that although rates are on the rise, most
students will probably continue taking out loans.
"I think they'll wait till they get out of school," Sims said. "I don't think
they really concern themselves with it until graduation."
ALL Student Loan, based in Los Angeles, is one of many
organizations helping students across the nation consolidate their
loan payments. Marketing and communications associate Aran
Richardson said there are a "number of benefits" from choosing to
consolidate.
Probably the largest benefit is that by choosing to consolidate, a
student can lower their monthly payment by as much as 50 percent
with an extension of the loan term. Another perk is a fixed rate. "If
they consolidate, they can lock in a fixed interest rate," Richardson
said.
Richardson said that since loan rates are currently at a historical low
and will be until the increase occurs in July students should
consider the possibility of loan consolidation.
Sims said most students are generally aware of rates at any given
time, and regardless if they are high or low, if they need a loan, they
will do what they need to do to get one. Many never consider the
option of consolidation.
According to Sims, only students with several loans need to concern
themselves with thinking about consolidation. At USC Sumter, many
students have Stafford and Perkins federal loans. Some of those
who have both look to consolidation to reduce their interest rate
payments.
Sims said it is uncommon for students at USC Sumter to amass
student loan debt to a degree that they feel it is insurmountable.
"I know that they can borrow upwards of $50,000, but it's rare we
see anyone hit that point," she said.
The individuals who often acquire the most student loan debt are
those who return to school after already having attended once,
according to Sims.
By MARY DOLAN
Education Reporter
Mdolan@theitem.com
Source : www.allstudentloan.org
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