Originally published July 11 2005
Impending rise in interest rates brings flood of student loan consolidations
by Mike Adams, the Health Ranger, NaturalNews Editor
Because student loan interest rates are adjusted each July -- and this July they jumped 2 percent -- tens of thousands of borrowers rushed to consolidate their loans before the July 1 deadline and lock in one of the lowest rates in history, reports the Baltimore Sun.
Still, the Mitchellville father sent several e-mails reminding them to consolidate federal student loans before higher interest rates kick in Friday.
"I've been pushing both of them to try to do that," said Gallagher, who did the same with $71,000 in parent loans last month.
They'll join tens of thousands of borrowers rushing to roll old loans into a new one and lock in the lowest interest rates in the program's 40-year history.
Schools and lenders alerted borrowers; the Department of Education sent out 1.3 million e-mails urging students and graduates to consolidate and switch to a fixed rate before it's too late.
"The number of applications that we are generating has tripled," said Kathy Claar, the consolidation business unit manager in Richmond, Va.
"There is an absolute crush of people," said Michael Hernandez, assistant director of loan services for North Texas Higher Education Authority.
Meghan Macina, who works at Academic Financial Services in Tampa, said employees can earn overtime by clocking in an extra 12 to 20 hours a week.
Some borrowers report the process is a breeze, taking 10 to 20 minutes either on the phone or online.
College Loan Corp., a San Diego-based loan provider, boasts that 97 percent of calls are answered by a person within 30 seconds.
I should have done it a month ago," said Elisha DeNeal, a parent in Fredericksburg, Va., who figures she spent three hours on the phone -- minus a half-hour dinner break -- with her lender last week.
Through a three-way phone conversation with her Fredericksburg lender and her son in Washington, DeNeal applied to consolidate her $14,000 in parent loans as well as his $33,600 in student loans.
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