Yesterday, the Federal Reserve unexpectedly raised target short-term interest rates to their highest level in five years, making it increasingly likely that interest rates on existing student loans, which are tied to the 91-day T-bill and reset on May 30, will rise by the highest margin in the student loan program’s history. Students, parents and graduates can protect themselves against these rate hikes and save an average of $3,200 by consolidating their student loans now and locking in current low rates for the duration of payments.

Even before the Fed rate increase, Stafford (student) loan rates were projected to be as high as 7.16 pct. and PLUS (parent) loan rates as high as 7.96 pct. These rates could now spike even higher. By consolidating before July 1, when the new rates take effect, students can avoid the rate hikes and lock in a rate as low as 4.5 pct. (1) — almost three full percentage points lower than the projected rates. Likewise, parents can lock in the low rate of 6.1 pct. Locking in these low rates ensures that monthly payments never rise, saving borrowers thousands of dollars in interest payments over the life of their loans.

“The Fed’s rate hike is another warning shot to all students, parents and graduates who have federal student loans — nobody should be in doubt that now is the time to consolidate and lock in major savings,” said Mark Brenner, vice chairman of College Loan Corporation. “The clock is ticking — with two months left until new rates take effect, borrowers must act now to save an average of $3,200.”

Graduates, parents and the Class of 2006 can get additional information on the changing federal student loan interest rates by calling College Loan Corporation. The Company offers free advice to students and families seeking financial solutions to meet their higher education goals. Expert Loan Consultants are available 24/7 at 800-2-COLLEGE.

Additional Benefits of Consolidation

In addition to securing the current low rates student loan consolidation offers additional benefits. Consolidation provides more flexibility, allowing borrowers with high balances to extend their repayment term and lower the amount they pay each month. Borrowers also benefit from the convenience of a single monthly payment.

Borrowers should be sure to shop around for additional benefits that are offered by different student loan providers. For example, in addition to a 0.25 pct. interest rate reduction for enrolling in automatic payments, College Loan Corporation offers a cash rebate up to 2 pct. (2) of the principal balance outstanding after making nine consecutive, scheduled payments on time — giving eligible borrowers cash in hand when they need it most.

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(1) With automatic payment plan. Conventional payers can lock in as low as 4.75 pct.

(2) Borrowers who meet the minimum consolidated loan balance requirement of $50,000 and make payments on time each month for nine consecutive months will receive a cash rebate equal to 2 pct. of their principal balance outstanding, up to $2,000. Borrowers who do not meet the minimum balance requirements but make payments on time each month for nine consecutive months will receive a cash rebate equal to 1 pct. of their principal balance outstanding, up to $500. Additional terms and conditions apply; please contact College Loan Corporation for details.

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College Loan Corporation, headquartered in San Diego, is the nation’s seventh largest student loan provider, owning and managing more than $9 billion in student loan assets. By offering innovative loan products and industry-leading customer service, the Company has helped make higher education possible for more than 600,000 students and families. More than 850 colleges and universities have designated College Loan Corporation as a preferred lender. College Loan Corporation’s student loan hotline offers expert loan consultants 24 Hours a Day, 7 Days a Week at 800-2COLLEGE.

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This entry was posted by Taman Siswa on Saturday, May 13, 2006 at 12:45 am and is filed under Student Loan. Tags: College, College Loan Corporation, Education News, Federal Reserve System, financial solutions, loan products, Loan Rates Set, Loans, Mark Brenner, preferred lender, San Diego, Student, Student Loan, . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.