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Rush to refinance student loans

TEXT OF STORY

SCOTT JAGOW: College students have 48 hours to do something about their government loans or face a steep increase in interest rates. Stacey Vanek-Smith has that story.


STACEY VANEK-SMITH: On Saturday, the government will raise the interest rates on federal student loans. Rates will jump nearly 2 points to just over 7 percent.
TERRY HARTLE: It's the biggest increase I've ever seen.

Terry Hartle is with the American Council on Education. He says he's not surprised to see students rushing to refinance.

HARTLE: For several years, interest rates were falling, and when they were falling, there wasn't the big interest in consolidating. Now that we're seeing a hike on July 1, there's a huge amount of pressure in June for students to make the consolidations.

It's estimated waiting until after the rate hike could add thousands of dollars in interest to each loan. That's the kind of money that could hang around long after students trade in the cap and gown for the business suit.

I'm Stacey Vanek-Smith for Marketplace.

About the author

Stacey Vanek Smith is a senior reporter for Marketplace, where she covers banking, consumer finance, housing and advertising.
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