Interest Rates

Dear Metro Readers:

Just a note to let you know that the new student loan interest rates have recently been announced and they are slated to be even lower than last year!! With the exception of consolidation loans and much older Stafford and PLUS loans, student loan interest rates are variable with a cap of 8.25% or higher depending on the year you took out the loan.

For Federal Family Education and Direct Loan Stafford loans taken out on or after July 1, 1998 that are in an in-school or grace period status, your rate will be 2.82%. If you’re already in repayment for your loans it will be 3.42%. Most other Stafford loans taken out prior to July 1, 1998 will be at 4.22% PLUS (parent) loans taken out on or after July 1, 1998 will also be at 4.22%. These rates are effective July 1, 2003 until June 30, 2004 when a new interest rate will be set and are the lowest interest rates in federal student loan history. This means that many of you may want to consider consolidating your student loans to “lock in” this low rate for the life of your loan.

We’ve discussed the pros and cons of consolidation in past columns so I won’t go into detail here, just remember to do your homework before you apply. You can find information on the Web, from whomever is holding your students loans or, for specific questions, by e-mailing me at askbetsy@amsa.com.
 
Regards,
Betsy