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Students loan interest rate change

No that is not a typo.  Student loan interest rates are scheduled to change come July 1st, 2008. Graph_dwn

The Department of Education announced the following interest rate changes:

Fixed Federal loan interest rates for loans disbursed on or after July 1, 2008:

  • · Subsidized Stafford Loan (Undergraduate Students) - 6.0 percent
  • · Subsidized Stafford Loan (Graduate Students) - 6.8 percent
  • · Unsubsidized Stafford Loan - 6.8 percent
  • · FFEL PLUS Loan - 8.5 percent
  • · FDL PLUS Loan - 7.9 percent

Loans with variable interest rates on FFEL and Direct loans made to borrowers before July 1, 2006:

  • · Stafford Loans (In-School / Deferment / Grace) - 3.61 percent
  • · Stafford Loans (Repayment or Forbearance) - 4.21 percent
  • · PLUS Loans - 5.01 percent

This is a 3 percent difference from 2007 and marks the largest student interest rate drop in the programs history!  It will be interesting to see if the new rate change will persuade students to look into student loan consolidation.

Do these rate changes help you?

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Posted May 30 2008, 04:08 PM by David
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Comments

Ray wrote re: Students loan interest rate change
on Wed, Jul 2 2008 11:31 AM

This is going to hurt students in the long run. Some banks have already stopped offering these loans because the margins are too thin.

Joe Cronin wrote re: Students loan interest rate change
on Wed, Jul 2 2008 12:53 PM

So if I have one loan with the variable rate and another with a fixed rate - should I consolidate?

David wrote re: Students loan interest rate change
on Wed, Jul 16 2008 7:01 PM

@Ray and @ Joe Cronin - sorry for the very late reply.  It appears I am not being notified of any pending comments... doh!

@Ray - Students may very well suffer in the end.  It will be interesting to see what develops.

@Joe Cronin - are you testing me ; )  

Well, because I am not a financial aid advisor and I don't know your current loan interest rates - I would have to advise you to check with your lender to see if it would be in your best interest to consolidate your loans.

I would suggest that if some of your loan(s) are at a low fixed interest rate, it may be best to leave those alone but again always check with your consolidating lender!

How was that?  : )

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