Tuesday Buzz: Guaranteed Student Loan Borrowers Can Consolidate
Their Loans While Still in School
May 17, 2005
The U.S. Education Department (ED) announced yesterday that students
still enrolled in college will be allowed to consolidate their federal
guaranteed loans, enabling them to lock in historically low interest
rates over the next few months, when rates are expected to start
rising.
Borrowers in the federal direct loan program are allowed to refinance
their debt while they are in college, while guaranteed loan borrowers
are not allowed to do so until they begin paying off their loans.
However, it recently was discovered that guaranteed student loan
recipients could lock in the low rate by choosing to repay their loans
while in college--then consolidating their loans and deferring payments
on the consolidated loans until they graduate.
For more information about ED's decision to approve this method, see
the following articles:
New Loan Repayment Option
Inside Higher
Ed
Students Get Chance to Refinance
Loans
The Wall Street Journal/Sun-Sentinel.com
(FL)
Students in Guaranteed-Loan Program Can Lock In Low
Consolidation Rates While Still in College, Department Says
The Chronicle of Higher
Education (sub. req.)
Student Borrowers Get a Break
The San Francisco
Chronicle
Student Loan Consolidation Limits Eased
The Washington
Post ( free reg. req.)
Marshall Loeb's Daily Money Tip
MarketWatch (free
reg. req.)
Lock in Student Loan
Rates
The Akron Beacon Journal (free reg.
req.)
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