New Law to Increase Student Loan Payments
Posted on: January 3, 2006
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On December 21, 2005, Congress passed legislation that will cut
billions of dollars in funding out of the federal student loan program.
The Wall Street Journal reports that the "loss of $12.7 billion [in funding] means that graduates will face higher interest payments, fewer options." *
Under the new law, you will no longer be able to fix the interest rate
on your loans at today’s historically low rates. Consequently,
according to the Wall Street Journal, someone with $20,000 in student
loans can expect to pay over $2,000 more in interest over the life of the loan.*
Fortunately, by acting now you CAN avoid the new law and save thousands of dollars in interest. Under current federal law, you can consolidate your loans and lock in a rate as low as 3.5% for the life of your loans – under the new law your rate would be 6.8%.
Consolidate your loans now to beat the new law and lock in thousands of dollars in savings — don’t wait until it’s too late! USA Today reports that anyone who has not consolidated their student loans should consolidate before the law goes into effect.**
*Congress Cuts Funding For Student Loans, Wall Street Journal, December 21, 2005, Section D1.
**Consolidating student loans now will save on interest, USA Today, December 22, 2005, Online Edition.
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