Forget about fellowship or study abroad applications, a very important deadline for students is fast approaching. Starting on the first of July, the interest rates of student loans will rise from 2.7 percent to 4.7 percent. However, there are steps students can take to avoid this increase.
If you choose to consolidate your loans before June 30, all of your loans will be locked in at the 2.7 percent interest rate. This process combines several loans into a single loan. While consolidation reduces the monthly payments you must make, it also extends the duration of the loan repayment term. In some cases, the terms of consolidation require you to begin paying off the loan prior to graduation. Either way, students should pay careful attention to the specific requirements of their consolidation and also be wary of unsolicated offers by loan companies.
Some institutions at Penn have already taken steps to assist students in the consolidation rush. For instance, Student Financial Services has published some very useful information about the loan consolidation process on their website. Unfortunately, most students do not make it a habit to regularly check the Student Financial Services website. Earlier this year, SFS sent out a mass mailing to students reminding them of financial aid application deadlines. Similarly, SFS should send all students an email alerting them to this upcoming deadline.
The 4.7 percent interest rate can be avoided but time is running out.
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