June 30 last day to consolidate student loans

• 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.