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Changes in Store for Student Loan Programs

By Stephen Borkowski

March 05, 2007

Recent changes on popular student loan programs will affect recent college graduates, incoming college freshman and parents too.

Interest Rates Up

As of July 1, new Stafford loans carry a fixed interest rate of 6.8 percent for the life of the loan. Previously, Stafford loans had a variable interest rate that was adjusted every July and a lower interest rate while the borrower was in school or in the grace period.

Loans disbursed before June 30, 2006 still have variable interest rates. On July 1, those rates rose by 1.84 percent. The interest rate for Stafford loans with in-school or grace period status moved up from 4.7 percent to 6.54 percent. The interest rate for Stafford loans that are in repayment rose from 5.3 percent to 7.14 percent.

Consolidation

As of July 1, 2006, only borrowers who are out of school are permitted to consolidate their loans.

PLUS Loans

Parent Loans for Undergraduate Students (PLUS loans) had their interest rate rise from 6.1 percent to 7.94 percent on July 1

.

As of July 1, the interest rate for new PLUS loans was fixed at 8.5 percent for the life of the loan.

Graduate and professional students will now have the option of taking out PLUS loans.

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    koleman99

    over 1 year ago

    Will That help me get a loan for my books and every thing alse that I will need

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    MitchM44

    over 2 years ago

    Whats the process to consolidate my loans ? I graduated in May & would like to have them all rolled into 1.
    Thanks

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    ejuspray

    over 2 years ago

    I'm having a difficult time attaining a loan. My parents are not able to co-sign for me because of their credit history. please help need it now.

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    ToniannW3

    over 2 years ago

    U should tried Discover Student Loan

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    AdrianaP123

    over 2 years ago

    HELP!
    I'm having a difficult time attaining a loan. Since I make less than $12,000. per year a cosigner is needed. Unfortunately my parents have large mortgages, some debt and have already cosigned for my brothers education. They are willing to cosign but the banks will not give me a loan. What can I do? Please someone help me!!!!!!!!!!!!!