Summary
June 30 is the last day to consolidate variable-rate college loans into fixed-rate loans before rates begin to rise. This date applies to both Stafford loans and student loans, and Plus, or parent loans. Consolidation and repayment rules vary depending on whether your loan came from the government or a commercial lender. Students don't have to start making payments on Stafford loans until they have finished school, and have a six-month grace period after graduation. Some tips for students considering loan consolidation include looking at the total cost, comparing rates, comparing repayment terms, and inquiring carefully about penalties.
Original source:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2005/03/22/BUG8RBSPLF1.DTL
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Responding to Thursday's column on student-loan consolidations, reader Glenn Letsch asks: "Our daughter Alysia is graduating from UC Davis in June, with a B.A. in psychology.
She will need student loans to get through the program.
If we wait to lock in the rate until after she finishes grad school, we run the risk of a higher interest rate.
Letsch will be happy to know he can have his cake and eat it too, but like everything in college financing, the reasons are complex.
His question demonstrates why students should not wait until the last minute before deciding whether and with whom they want to consolidate.
The last minute is June 30 -- the final day to consolidate variable- rate college loans into a fixed-rate loan before rates go up, probably by two percentage points or more.
This applies to government-guaranteed Stafford loans (taken out by students) and Plus loans (taken out by parents).
The rules for consolidation and repayment differ slightly if your Stafford or Plus loan came directly from the federal government (a direct loan) or from a commercial lender (such as Sallie Mae or a bank) under the Federal Family Education Loan Programs.
At other schools, borrowers can choose a commercial lender for their Stafford or Plus loans.
Students don't have to make any payments on their Stafford loans while they are in school, during a six-month grace period after they graduate or stop going to school at least half time, or during deferment periods sometimes granted for economic hardship.
In this case, a
student who consolidated after graduation but before July 1 might have to make a couple of payments before entering grad school in the fall and going back into deferment.
About the author: Mike Adams is a consumer health advocate and award-winning journalist with a mission to teach personal and planetary health to the public He is a prolific writer and has published thousands of articles, interviews, reports and consumer guides, and he has published numerous courses on preparedness and survival, including financial preparedness, emergency food supplies, urban survival and tactical self-defense. Adams is an honest, independent journalist and accepts no money or commissions on the third-party products he writes about or the companies he promotes. In mid 2010, Adams produced TV.NaturalNews.com, a natural health video sharing website offering user-generated videos on nutrition, green living, fitness and more. He's also the founder of a well known HTML email software company whose 'Email Marketing Director' software currently runs the NaturalNews subscription database. Adams volunteers his time to serve as the executive director of the Consumer Wellness Center, a 501(c)3 non-profit organization, and practices nature photography, Capoeira, martial arts and organic gardening.
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Thursday, April 07, 2005
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