TIMING IS EVERYTHING.

Navigation: Main page

Author: Lankford, Kimberly

Section: Your Money

Q&A

TIMING IS EVERYTHING

With interest rates likely to drop again, hold off on consolidating STUDENT LOANS.

Everyone seems to be recommending student-loan consolidation. But wouldn't it make sense to wait until July, when rates may be even lower than they are today?

-- CHRIS POMIETTO,

Pittsburgh, Pa.

The record-low rate for Stafford student loans--4.06%--has sparked a consolidation boom. But you're right that rates may fall still further The rate is based on the yield for the 91-day Treasury bill, plus a fixed margin. The T-bill was yielding 1.76% when the 4.06% rate was calculated last year; it was yielding 136% in mid April.

Because you can consolidate only once, if does make sense to delay your decision. it's not all guesswork, either. The July 1 rate wig be based on the Treasury-bill auction in late May, which means you'll know the new rate more than a month before it takes effect.

Most lenders work to ensure the best deal. Beginning May I, Collegiate Funding Services won*t process consolidation applications until the new rate is known. If the rate is headed down, your consolidation request will be put off until after July 1. Anyone who applies for consolidation through Sadie Mae in June will receive the better of the two rates.

Got a question? See page 6 for information on how to send it to us.

ILLUSTRATION (COLOR)

~~~~~~~~

By Kimberly Lankford

Some items on this website are used by permission granted
in the Fair Use guidelines of the 1976 U.S. Copyright Act.
info [at] singlearticles.com
Powered by CommonSense

GOOGLE'S IN ON YOUR PLANS.
Google Calendar (beta), Create private online calendars, share them with a group, or let everyone on...

GRAPHIC NOVELS: FOR TWEEN GIRLS.
The article offers information on several graphic novels for young girls. "Peach Fuzz," vol. 1, is a...

Dell Unveils its iPod Kryptonite.
The evil scientist Lex Luthor used his duplicator ray to try to clone Superman, but something went t...