As of July 1st 2006, low FIXED interest rates for Consolidation Loans (which pay off Stafford Student Loans or Direct Student Loans) went into effect. Should you consolidate your Stafford Loans before June 30th 2007, you may save thousands of dollars over the life of the loan depending on your principal balance.

By obtaining a Consolidation Loan now, you will be given a FIXED interest rate as low as 5.625 percent including discount benefits or lower depending on when your variable interest rate student loans were disbursed and the rate of any previously fixed interest rate consolidated loans. With consolidation, you may reduce the amount of your monthly student loan payments by as much as 50 percent.

The interest rate on a Consolidation Loan is FIXED for the entire life of the loan and is based on the weighted average interest rate of the loans being consolidated, rounded up to the nearest 1/8 percent. For borrowers with variable rate Stafford loans submitting a consolidation application during their grace period, the interest rate of the Consolidation Loan will be based on the relatively lower grace period interest rate reported by the loan holder**.

Also, as of July 1st 2006, low FIXED interest rates for Consolidation Loans which pay off Grad PLUS Loans and traditional PLUS loans for parents (PLUS loans or Direct PLUS Loans) went into effect.

By obtaining a Consolidation Loan which pays off PLUS loans before June 30th 2007, you will be given a FIXED interest rate that will never increase.

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*The rate for a consolidation loan is the weighted-average rate of the loans being consolidated, adjusted up to the nearest one-eighth of a percentage point, not to exceed 8.25%. Borrowers considering loan consolidation should research their options and seek advice before moving forward. Consolidation rates may be higher for some borrowers based on the type(s) of federal loans included in the consolidation.

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**For loans issued after July 1, 1998, Stafford loans are capped at 8.25%, and parent PLUS loans may not exceed 9.00%.