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Save Thousands on Your Student Loan Repayment. Take Action July 1st.

On July 1st, borrowers who have federal loans with a variable interest rate will be able to take advantage of the lowest interest rates in the history of student loan programs through loan consolidation.

Borrowers who consolidate will not only save themselves a lot of hassle but a great deal of money as well. The new interest rates will save borrowers thousands of dollars over the life of the consolidated loan. Here’s what you need to know:

When:

July 1st, 2009

How to Consolidate:

www.loanconsolidation.ed.gov

New Rates:

• Stafford Loan Consolidation (In-School/Grace Period): 2.00%
• Stafford Loan Consolidation (Repayment Period): 2.50%
• PLUS Loan Consolidation: 3.38%

What You’ll Save:

If you had a $20,000 Stafford loan with standard 10-year repayment plan and a 6.8% interest rate, you could expect to pay $230 a month and $7,619 over the life of the loan in interest.

But, if you locked in the 2% interest rate available after July 1, you’d pay $184 a month and only $2,083 in interest over the life of the loan. That’s a 20% lower monthly payment and total interest savings of $5,536 (73%).

Using the same example, with a 20-year repayment term, you could expect to pay a third less per month and three quarters less in total interest over the life of the loan, a savings of $12,358.

To see the requirements and exceptions to the new interest rate offerings, read the fine print here.

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