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June 22, 2005
Student loan rates set to make highest one-year increase
June 15, 2005 Issue of The Minnesota Daily
Student loan rates set to make highest one-year increase
In the recent issue of The Minnesota Daily, there was an interesting article that affects me and my of my fellow students that have financed their college educations. The article talked about how the Federal Government is going to raise interest rates on July 1st. This is not a new practice but the interest rate has never been raised so drastically. Currently the interest rate is 2.77 percent when you are in school and 3.37 percent once you are out of school and the six-month grace period is over. After July 1st the rate will jump to 4.7 percent when you are in school and to 5.3 percent when you get done. Just for an example say that you had $20,000 in student loans and you plan to pay the loan back in 10 years. With the increased interest rate, the loan would cost you $33,939 with monthly payments of $215 a month. At the current interest rate loan would cost you $31,971 with monthly payments of $210. By consolidating now, you could save yourself $2000. That is a pretty good deal.
I our group my fellow group members were either unaware that the interest rates were rising or did not know exactly how to go about getting their loans consolidated. If you follow this link, you can find out some more information but you better hurry up July 1st is rapidly approaching.
Comments
I think that it is really sad that they have to raise the interest rate so drastically. Think of how hard it is going to be for students when they graduate. They will continue to be in debt because of these loans and the interest rate increase does not help. Many students keep taking loans out and not realizing how much they are racking up in loans. It will be a hard hit when they need to start paying them back.
Posted by: Dianna at June 23, 2005 10:14 AM