Student loan consolidation window is closing
Still paying back your student loans? Rates for federally-backed college loans are set to increase on July 1. There's still time to consolidate if you move quickly, but that's not necessarily the right move for everyone, reports Steve Tripoli.
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SCOTT JAGOW: If you have a college loan to pay off, take note. If any of that money came from the federal government, you should know that loan rates are going up July 1, but you have a window before then to get a lower rate. Steve Tripoli explains.
STEVE TRIPOLI: The government gives everyone a single chance to consolidate their college loans. And Mike Ryan of the nonprofit American Student Assistance says new graduates can lock in an extra discount during a short grace period.
MIKE RYAN: That would typically be six months after they leave school.
But with loan rates adjusting on July 1, they’ll have to get their paperwork in by June 30. Consolidating now can drop the interest rate by six-tenths of a percent.
Ryan says it’s not a sure bet for everyone, because consolidating trades lower payments for more years of them.
RYAN: So for borrowers with a considerable amount of debt they want to think about whether they want to have that lower payment in exchange for a longer repayment term.
Students, if you’re interested make a list of all your loans. Then figure out if consolidation saves money or effort over time.
And shop around. Many student lenders have conflict-of-interest problems these days. Ask private lenders for their six-digit “federal lender code.” That’ll show you they’re playing by government rules.
I’m Steve Tripoli for Marketplace.
TEXT OF STORY
SCOTT JAGOW: If you have a college loan to pay off, take note. If any of that money came from the federal government, you should know that loan rates are going up July 1, but you have a window before then to get a lower rate. Steve Tripoli explains.
STEVE TRIPOLI: The government gives everyone a single chance to consolidate their college loans. And Mike Ryan of the nonprofit American Student Assistance says new graduates can lock in an extra discount during a short grace period.
MIKE RYAN: That would typically be six months after they leave school.
But with loan rates adjusting on July 1, they’ll have to get their paperwork in by June 30. Consolidating now can drop the interest rate by six-tenths of a percent.
Ryan says it’s not a sure bet for everyone, because consolidating trades lower payments for more years of them.
RYAN: So for borrowers with a considerable amount of debt they want to think about whether they want to have that lower payment in exchange for a longer repayment term.
Students, if you’re interested make a list of all your loans. Then figure out if consolidation saves money or effort over time.
And shop around. Many student lenders have conflict-of-interest problems these days. Ask private lenders for their six-digit “federal lender code.” That’ll show you they’re playing by government rules.
I’m Steve Tripoli for Marketplace.