Consolidation could mean college loan savings

Monday, June 26, 2006

Midnight Friday is your deadline if you're one of the millions of people with a student loan.

The latest government reports show the amount of student loan debt has sky rocketed to more than $50 billion. Now, students, parents and graduates have just a few days to save money.

Getting accepted to the college of your choice may not be as difficult as paying for it. More than 60 percent of U.S. students are graduating with student loan debt.

"I was going to need a lot of money to help pay for living on campus," University of South Florida/St. Petersburg campus senior Jennifer Massey said. "I got the federal Stafford loan, the subsidized Stafford loan, so that's about $7,000.

Massey is one of nine million people across the country with a federal Stafford loan.

But as they try to beat the June 30 deadline, students are calling loan consolidation companies like One Simple Loan in Pinellas County. Their goal is to lock in a low fixed interest rate and consolidate before the law changes July 1. That's when the interest rate jumps almost two points.

"A borrower who has $50,000 in students loans right now, if they consolidate before June 30, they're going to save $29,000 in interest," One Simple Loan President Paul Simino said. "If they consolidate anytime after July 1st they're going to lose that $20,000 to the bank."

Changes in the law next month will also limit who can consolidate to a more a manageable payment plan.

"This is the last opportunity for borrowers to reconsolidate if they have loans that have already consolidated," Simino said. "It's the last chance for a lot of borrowers who are in school to consolidate their loans. Those are going away July 1st with the Deficit Reduction Act that President Bush just signed into law on Feb. 8."

You don't need multiple loans to consolidate and save money. Even students with only one lender may be eligible to shop around for the lowest fixed rate. The deadline is June 30 at midnight.

Your past payment and credit history should not be a factor to qualify if your loan is federally guaranteed.

To learn more about consolidating your student loan and finding the best interest rate before the deadline, here's the U.S. Department of Education Consolidation Department web site: http://www.ed.gov/offices/OSFAP/DirectLoan/consolid2.html. The phone number is (800) 557-7392.

One Simple Loan's phone numbers are (877) 663-7467 or (813) 343-6500.

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