interest rates on federal loans

[LaughingGiraffe]

i know the interest rate on federal loans gets adjusted each summer. when that happens, do all earlier loans start to accrue interest at the new rate, or just that year's loans? in other words, is the rate when you get the loan a fixed rate unless you consolidate to a lower rate?

i hope this is the case, since i suspect that sometime in the next few years rates will climb again, and i'd rather have at least a year or two of med school loans that accrue interest at current rates...

thanks!

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[Brewster]

Stafford loans are variable rate loans. Sorry.

 

[manta]

i'm not very financially savvy, but this sounds like good news -

http://www.cnn.com/2003/EDUCATION/05/08/student.loans.ap/in dex.html
i've been putting off consolidating, and now it sounds like i should wait until they readjust the rates again. sometimes, it pays to procrastinate.

 

[manta]

bump bump!
i guess i should've put this in the form of a question...
should i consolidate now? anyone think that waiting until july for the rates to go down again would be too risky?

 

[Brewster]

Originally posted by manta
bump bump!
i guess i should've put this in the form of a question...
should i consolidate now? anyone think that waiting until july for the rates to go down again would be too risky?

People have been asking this question a lot.

There is no danger in waiting. The new interest rate will be announced at the end of May (week after Memorial Day). If the rate goes down...fantastic. If the rate goes up, you still have one month to consolidate at the old rate before the new rate takes effect on July 1. Either way, you win.

 

[booshwa]

I just applied to consolidate my undergrad loans with Sallie Mae last month. Last week they sent me a letter saying they were going to wait until they find out the new rates until they process the consolidation (i.e. if the rates drop they will wait until it is official, if they raise they will process my loans immediately). The rates change in July (I believe) but somehow SallieMae knows in June.

As far as loan rates changing, if they aren't consolidated they will vary-which sucks because when I'm done in 4 years, I'm sure the economy will be rolling and interest rates will be at all time highs