Video of Congressman Sherman in Action
Washington, D.C. - Congressman Brad Sherman on Wednesday urged college students and recent graduates to consider consolidating their student loans before June 30.
A money-saving opportunity to consolidate student loans and lock in record-low interest rates expires in one week. New rates take effect on July 1.
“Student loan interest rates are expected to make the biggest jump in years. In order to consolidate your loans and save thousands of dollars, you must act soon,” Sherman said. "This could be a once-in-a-lifetime opportunity to lock in low rates and save thousands of dollars.”
As of July 1, the interest rate on the government's largest loan program, the Stafford student loan, is scheduled to jump nearly two percentage points from the current all-time low.
Consolidating several Stafford loans by June 30 would lock in the loans' lower rate and extend the repayment period.
A student who took out a $20,000 Stafford loan at today’s rate would pay $110 per month. Interest over 20 years would total $6,300. A student who misses the June 30 deadline would pay interest totaling about $12,700 over two decades.
In addition to saving money, consolidating your college loans and locking in a low rate could improve other aspects of the financial futures of recent college graduates.
Lower monthly payments improve graduates' credit scores so lenders are more likely finance a condo or a car for ex-students who owe smaller percentages of their salary.
In order to consolidate, students and graduates need to know all of their outstanding loans and the interest rates. The information is available at the National Student Clearinghouse Web site at http://www.studentclearinghouse.org. Another place to learn more about loan consolidation is the Education Department web site at http://www.loanconsolidation.ed.gov/ .
