It's STILL not too late to consolidate (although it almost is) / New loan interest rates for 05-06.
Today is the last day on which 91-Day Treasury Bills can be auctioned prior to June 1. Why is this so important? Because the interest rates for Stafford and PLUS loans are based on this rate.
So with the information available now, it appears that the new interest rates for PLUS and Stafford for 2005-2006 will be as follows:
- Stafford Loans: 5.30% interest during repayment and 4.70% interest during grace and in-school periods (for unsubsidized loans). This compares to rates during 2004-05 of 3.37% and 2.77% respectively.
- PLUS Loan: 6.10% interest rate repayment. This compares to 4.17% for 2004-2005.
As you can tell, rates are going up. What should you do?
If you are a graduating student, you should consolidate NOW to lock in the lower interest rates for the life of your repayment (see my previous post for more information on consolidation). One concern, if you do consolidate now note that you will more than likely lose your grace period and go into immediate repayment, but over the life of the loan you will save much more by having consolidated!
If you are incoming student, and you are considering the PLUS Loan as your financing option, it is time once again to take a look at the Fixed Interest Rate option of the MEFA Loan program (the fixed interest rate on the immediate repayment option is 6.19% -- and this rate will never rise during your repayment -- see below for more information on alternative loans).