Lake Superior State University
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Alum Success

Andrea Hornblower

"An opportunity like this never would have come available to me if I had not taken the program in the Sault College/LSSU International Division," Hornblower said. "My employer was very impressed with the fact that I not only had a degree in computer networking, but the hands-on knowledge, as well. This is the main reason that I was hired."

Andrea Hornblower, '06
Network Administrator
Brac Informatics Centre,
Cayman Brac, Cayman Islands

Parents at Lake State

Loan Consolidation Could Save You Money

Last chance. If you are thinking about consolidating a Stafford or Parent Loan for Undergraduate Students (PLUS loan), experts suggest that you do it before July 1, 2006. After this date, the loans that used to have annual variable interest rates will Loan Savinglock in higher percentage rates that will be in effect through 2012.

That's because Congress cut $12 billion from the student loan program this year, according to The Baltimore Sun (April 2, 2006). As a result, variable interest rates will disappear come July 1 and be replaced by fixed rates on new loans. For instance, new Stafford loans will go for a 6.8 percent interest rate while new PLUS loans will go for 8.5 percent.

The current variable rate for student loans is 4.7 percent and 6.1 percent for parent loans. The Johns Hopkins University (JHU) Office of Financial Services suggests the following when it comes to consolidation:

  • Students currently in school can consolidate their student loans now to fix the interest rate at the in-school rate for loans they've already borrowed.
  • Students and parents who didn't borrow money this academic year but think they'll need to borrow next year are advised to borrow now so they can consolidate the new loan into a fixed rate package.
  • Parents who have already borrowed loans can consolidate these parent loans now to fix the interest rate.

The JHU Office of Financial Services also advises students that using Direct Loan consolidation will provide them with the best market rates instead of going with private consolidation lenders. More information is available at http://loanconsolidation.ed.gov.

Encourage your student to talk with his/her financial aid counselor about these changes to get the best personal advice. Just keep in mind that the July 1, 2006 deadline is right around the corner.
Sources: "Game over July 1 for student loan rate lock-in," Baltimore Sun, April 2, 2006; Johns Hopkins University Office of Financial Services at www.jhu.edu/finaid/

Consolidation

When you combine multiple federal student loans with various repayment schedules into one loan so you can keep better track of your finances and just make one monthly payment.

Eligible Loans

According to the Federal Student Aid web site, the following federal education loans are eligible for consolidation into a Direct Consolidation Loan:

  • Direct Subsidized and Unsubsidized Loans
  • Federal Subsidized and Unsubsidized Federal Stafford Loans
  • Direct PLUS Loans and Federal PLUS Loans **
  • Direct Consolidation Loans and Federal Consolidation Loans
  • Guaranteed Student Loans
  • Federal Insured Student Loans
  • Federal Supplemental Loans for Students
  • Auxiliary Loans to Assist Students
  • Federal Perkins Loans
  • National Direct Student Loans
  • National Defense Student Loans
  • Health Education Assistance Loans
  • Health Professions Student Loans
  • Loans for Disadvantaged Students
  • Nursing Student Loans

** PLUS loans are eligible for in-school consolidation only if the parent borrower also includes other eligible, non-PLUS loans in an in school period.

Source: http://loanconsolidation.ed.gov/

Majoring in Nursing...

Katie Farnsworth

Katie Farnsworth
Nursing
Big Rapid, MI

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