Procrastinators with student loans are lighting up phone lines as tonight’s midnight deadline to lock in interest rates quickly approaches.

“In June it started with what I would call medium heavy,” said Bob Zier, the vice president of loan consolidation for Indiana Secondary Market Education Loans. “Last week was heavy, and this week it’s just coming at us.”

On Saturday, interest rates on many student loans will increase by almost 2 percentage points as the rates will shoot up to 6.54 percent for students and 7.14 percent for graduates.

Although the specific rates are different, they are rising by a similar margin for parents who take out loans to pay for their children’s education.

Today is the last day to lock in a loan at the current rate.

Zier said the higher rates on an average loan could cost a student nearly $20,000 more by the time it is paid off.

“They can still consolidate after tomorrow,” Zier said. “(But) they will lock in at a higher rate.”

Colleges and universities have been trying to warn their students that the increase was coming.

Valparaiso University’s Web site tells students that they can lock in interest rates at 4.75 percent if they consolidate before Saturday.

Phyllis Schroeder, the associate director of financial aid for VU, said the school started a campaign in April to get the word out.

“There was a flurry of activity then,” Schroeder said. “A lot of people did pay attention to that mailing.”

However, Schroeder said, there is a group of people who are seeing this week’s headlines and trying to do some last-minute consolidating.

“They’re just now getting on to it,” Schroeder said.

Wes Lukoshus, a spokesman for Purdue University Calumet, said information was posted on the school’s Web site.

But technical problems dropped it from the page.

“For whatever reason it’s not there now,” Lukoshus said Thursday.

Lukoshus said the school was trying to get the information back up before it’s too late.

Still, he said, students know what’s coming.

“We have had an increase in our inquiries,” Lukoshus said. “Our financial-aid people are referring those people to their lenders.”

Zier said he has asked the people answering the phones to find out why people have waited so long to call about a consolidation.

The answer is usually procrastination, he said.

“They just wait and wait and wait,” Zier said.

Source: www.post-trib.com

This entry was posted on Friday, June 30th, 2006 at 10:15 pm and is filed under Student Loan. Tags: College, Education, Financial Aid, Loans, 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.