2.57%...this is sweet

[evescadeceus]

The new interest rate on federal student loans is 2.83%, for those of us who are consolidating, n locking up our rates. Deduct a quarter percent for doing automatic withdrawal from your checking account, a popular option, and its 2.5%.

This is so sweet. Wouldn't it be nice if it would stay this low for a while?

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[JumboFool]

I read about this in the paper! Doesn't the new rate only kick in July 1st though?

Also, do you know if loans we are given as part of financial aid packages will be disbursed after July 1st, so as to lock in the new rate??

 

[Brewster]

Stafford Loan rates change annually. So, even if your loans were disbursed before July 1, the interest rate on all your loans would drop to the new rate on July 1.

 

[JumboFool]

sweet, thanks for the info Brewster.

 

[Bounty]

i read that its only 2.83 for people woh are currently in school, in deferment, or in grace period. Otherwise it is 3.42 or something.
So none of those apply to me because I graduated in 2002 but can i wait till I start med school to consolidate my undergard loans (so that i am in deferment?)

 

[TroutBum]

Bounty, where did you read that? I thought all federal education loans with a variable interest rate would change to the current rate, unless you've already consolidated to lock them into a fixed rate. But, you can't consolidate unless you are past the grace period and in repayment (which means we can't lock in this rate for any loans we recieve if we're in school now, because it's likely a sure thing rates will increase). I was planning on consolidating my undergrad loans to make sure I lock in the lowest possible rate, and then applying for deferment. Am I doing this backwards? Maybe I should go look into it. . .

 

[Brewster]

Originally posted by TroutBum
Bounty, where did you read that? I thought all federal education loans with a variable interest rate would change to the current rate, unless you've already consolidated to lock them into a fixed rate. But, you can't consolidate unless you are past the grace period and in repayment (which means we can't lock in this rate for any loans we recieve if we're in school now, because it's likely a sure thing rates will increase). I was planning on consolidating my undergrad loans to make sure I lock in the lowest possible rate, and then applying for deferment. Am I doing this backwards? Maybe I should go look into it. . .

I am not sure what the earliest you can consolidate is, but I almost positive you can do it in grace, deferment (economic deferment, at least), forbearance, or repayment.

 

[TroutBum]

Originally posted by Brewster
I am not sure what the earliest you can consolidate is, but I almost positive you can do it in grace, deferment (economic deferment, at least), forbearance, or repayment.

Hey Brewster, I know that if you're in an in-school status, the only type of loan you can consolidate is a Direct Loan. So, if you have a Direct Loan, disbursed after July 1, you can consolidate it as soon as you recieve it to lock in the low rate.

Great if you have a Direct Loan, otherwise you can enjoy the low rate while it lasts but can't lock it in by consolidating unless you graduate while it's still here.

Bounty, after reading the article on CNN, I think you have it right--defer, get the low rate, then consolidate (I had it backwards). Pretty sweet.

 

[uclamendoza]

great information! i think you should post this in the financial aid section of sdn.......

 

[tBw]

hopefully yhis will get moved the FA forum...

I mean it IS good and all, but I think most people here aren't quite at the point of worrying about this yet!

 

[bobmarley77]

I posted in the FA forum but no one responded.

I had graduated a few years ago and I am repaying my undergraduate stafford loan. I want to take advantage of the lower "deferment" rate.

If I go back into deferment by going to graduate school in August can I consolidate my undergraduate stafford loan then?

If the answer is NO, would applying for unemployment deferment right now (which I am currently eligible for since I'm unemployed) allow me to consolidate??

In other words, is "in-school" deferment treated differently from "unemployment" deferment?