If you don't consolidate your student loans by Oct. 1, you may pay higher interest rates and fees for your loans, and your hair will fall out.
OK, we made up the part about the hair. But the language in some marketing campaigns by student lenders and loan consolidators is pretty alarming.
The website for EdFed, a student loan consolidator, warns, in red type, that "if you miss the (Oct. 1) deadline and consolidate your federal student loans after that date, your consolidated interest rate could be at least 1.25% higher!"
The website for ScholarPoint cautions that "Congress recently passed new legislation that will significantly reduce or eliminate the ability for ScholarPoint and other education finance companies to offer money-saving borrower benefits."
In past years, loan consolidation allowed borrowers to lock in current interest rates, a money-saving strategy three years ago, when rates were at all-time lows. But last year, Congress eliminated variable rates for Stafford loans. Loans issued after July 1, 2006, have a fixed rate of 6.8%.
Source:
http://www.usatoday.com/money
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