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July 1st, Record-Setting Drop in Student Loan Interest Rates
msnbc.msn.com — Both new and current student loan borrowers of certain federal Stafford student loans saw two interest-rate drops go into effect yesterday that could save them significant amounts of money on these fixed- and variable-rate student loans.
1KrazyKorean- 796 diggs
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- RicardoWilliams, on 07/02/2008, -2/+11i like.
- DrCrankenstein, on 07/02/2008, -2/+38Hell yes, I actually have a Stafford Loan.
Count this as the most personally important thing I've seen on Digg thus far.- YancyFryJr, on 07/13/2008, -1/+2Amen.
- gak001, on 07/04/2008, -1/+2Especially after we just got ***** by PHEAA here in Pennsylvania. It's nice to FINALLY have some good news about paying for college.
- darkshadowfor, on 07/04/2008, -1/+0What are you referring to with PHEAA?
And this is some good news, even though all the loans I have are subsidized.
- darkshadowfor, on 07/04/2008, -1/+0What are you referring to with PHEAA?
- gbarberi, on 07/03/2008, -2/+8Finally, some good news for me.
- rattledhormones, on 07/03/2008, -10/+2Gee Digg Recommendation Engine ... thanks for the recommendation on this spammy student loan press release from a student loan company ... you are really working wonders!
- KSUdesigner, on 07/03/2008, -0/+13My account is still showing that my rate is 7.22%. I'm guessing they just haven't updated the online system yet, especially since they are showing that they haven't received my payment for the month even though it cleared my bank 2 days ago. Will be nice to actually see that much of a rate cut.
- brad3378, on 07/04/2008, -0/+2To give you a ballpark idea what to expect, my unsubsidized Sallie Mae loans dropped from 5.75% to 4.75%
- brad3378, on 07/04/2008, -0/+2To give you a ballpark idea what to expect, my unsubsidized Sallie Mae loans dropped from 5.75% to 4.75%
- alexkehr, on 07/03/2008, -3/+6Top 5 Scholarship Slip-Ups... http://dormscout.com/2008/07/03/top-5-scholarship- ...
- ry4nsm1th, on 07/04/2008, -0/+2Those tips apply to many tasks, not exclusive to scholarships.
- alexkehr, on 07/04/2008, -0/+1True, they apply to really anything you are going to hand over to somebody that's work/school related.
- ry4nsm1th, on 07/04/2008, -0/+2Those tips apply to many tasks, not exclusive to scholarships.
- wildfire, on 07/03/2008, -1/+9Since there's still a credit crisis, it's difficult to find companies that will consolidate your student loans. When I called NextStudent, they said they're only funding NEW loans. I called Citibank and spoke with Devin who said they only offer PRIVATE student loan consolidation, but I believe she said starting July 1st I could contact Direct Loan Consolidation at 1-800-557-7392 for FEDERAL student loan consolidation.
Anyone have any luck consolidating recently?- agirlaware, on 07/04/2008, -0/+0I talked to Chase Bank the other day, I believe they are consolidating both private and federal. Check into the other banks that consolidate as well.
- santaliqueur, on 07/04/2008, -2/+7Wait, is this a story about "The Man" giving us something we want? I'm sure diggers will find a way to claim this is part of a big scheme to screw us over.
- sillywongster, on 07/04/2008, -2/+2If by "The Man" you mean the US Economy in the gutter which will take away your ability to make those consolidated payments, then YES!
There's always a catch!- santaliqueur, on 07/04/2008, -1/+3You are an example of who I was describing. America is always at fault somehow.
- PeppermintPig, on 07/04/2008, -0/+2Do you have a loan, santaliqueur? If so, tell us where you are in a year financially.
- santaliqueur, on 07/04/2008, -0/+2Yes I have a few student loans, and I'm doing fine financially, not that it's any of your ***** business. Keep up the doomsday stuff, the entire country should be collapsing any day now.
- LansingSterling, on 07/04/2008, -0/+1it is part of a big scheme to screw us over.
proverbs 22:7
The rich rules over the poor, And the borrower becomes the lender's slave.
- sillywongster, on 07/04/2008, -2/+2If by "The Man" you mean the US Economy in the gutter which will take away your ability to make those consolidated payments, then YES!
- lvlln, on 07/04/2008, -1/+4How do you take advantage of this? I just graduated last year and could use some lower monthly payments.
- sillywongster, on 07/04/2008, -0/+2Figure out which loan company holds your loans (call your college's Fin. Aid office if you need to), then call the company or go to their website and create an account. You should be receiving bills in the mail already or at least status updates from them. You want to then request a consolidation loan. You can get Federal or private. I recommend Federal!
See finaid dot org for further advice.
- sillywongster, on 07/04/2008, -0/+2Figure out which loan company holds your loans (call your college's Fin. Aid office if you need to), then call the company or go to their website and create an account. You should be receiving bills in the mail already or at least status updates from them. You want to then request a consolidation loan. You can get Federal or private. I recommend Federal!
- Armor1901, on 07/04/2008, -0/+24I work for a major company owned by SallieMae as a supervisor overseeing collection efforts of federally insured defaulted student loans. The interest rate change has been quick, as just today at 7am our accounts have been documented and the appropriate interest rates changed. This is HUGE and depending on the size of the loan, can make a difference of 200-500 dollars a month in payment amounts. If you need to consolidate, do 1 of 2 things:
1) Get a FFELP (Family Federal Education Loan Program) consolidation
2) Contact Direct Loans and do what's called a William D. Ford consolidation. A WDF CCL carries with it the benefit of having payments be income contingent, meaning your loan payments will be based off your income, expenses, and family size.
Good luck, and Happy 4th!- ronnsprocket, on 07/04/2008, -0/+2great help!
- djcreamy, on 07/04/2008, -0/+1Watch me get sage financial advice from Digg.
In 2005 there was a massive jump in student loan interest rates. Companies began pounding my USPS and email inbox with consolidation offers AFTER the rate increase. They knew the rates would go down, but they used fear to attract more clients. Is this an accurate summary, or do I not understand their business model?
I payed off my $14k William D. Ford loan about three months ago, now I feel great. My remaining loan is three parts - 5k unsub, 5k sub, 13k private. Can I still consolidate those? Should I hold off?
- Kinglouis3, on 07/04/2008, -0/+4I work in a financial aid office and this is all great until you realize that you don't have the variable rate stafford loans but the fixed rate which didn't change at all.
- greevar, on 07/04/2008, -0/+1I have both.
- cvrefugee, on 07/04/2008, -0/+1So, what does this mean?
"Borrowers with subsidized Stafford loans that were disbursed on or after July 1, 2006, also saw a reduction in their interest rate, albeit a much smaller one. The rate on these student loans, which was previously fixed at 6.8 percent, dropped to 6 percent yesterday and will continue to fall over the next four years for both new and current borrowers, eventually dropping to 3.4 percent in 2011."- Kinglouis3, on 07/09/2008, -0/+1For people with subsidized loans the federal government will pay the interest on the loan while the student is in school, but when the student graduates the interest rate goes back up to 6.8%. Basically the government lowered the interest rate to help themselves.
- JasonCox, on 07/04/2008, -1/+1I've given up on my student loans; these guys want 1/4 of my monthly take home salary each month (might I add, I don't make bad money *at all* for a 22yr old). I'm just going to keep this crap in forbearance until I buy a house, then the wife can share in my loan debts via a 2nd mortgage.
- Armor1901, on 07/04/2008, -0/+2Doesn't matter what your salary is, it matters what the size of the debt is, which is what you agreed to pay off when you signed your prom. note. Default on it, and they'll take 15% of your income pre tax. Trust me, I do it every day. See my above post.
- ScottMitchell, on 07/04/2008, -0/+3Why are you going to buy a house when you already have debt that you can't afford to service? Jesus Christ, that's about as smart as cutting off your hand because you injured you finger.
- PeppermintPig, on 07/04/2008, -0/+3It's okay, though. He'll probably pass away with debt and it won't be his problem anymore. That's how the politicians in government are doing it, anyways, but they only have to rake in enough cash before they leave office.
- ScottMitchell, on 07/04/2008, -0/+2PeppermintPig: for him to die with debt (at age 22) he's either going to have a short life or a long life with debt hanging over his head.
Why not just be an adult about it and pay down your existing debts before taking on new ones?
- bxblox, on 07/04/2008, -0/+3Yeah, two mortgages will fix that debt.
- thegools, on 07/04/2008, -1/+2I feel you man. With mine and my wife's I'm dishing out 1/3 of my income. To make do we moved to the ghetto for cheap rent and water down my infant's juice.
The fed loans aren't so bad but the private one's suck. ***** my naivete for going to a liberal arts college on the west coast and just signing on the dotted line, but ***** the financial aid "advisors" for blowing smoke up my ass and saying that I'd have no trouble paying it off after I got that all important piece of paper.
- sillywongster, on 07/04/2008, -1/+0Just applied for my consolidation loan: from 7.22 down to 4.21...HELL YEAH BABY! The lower interest rate should be automatically applied to your loans without you having to do anything, but never hurts to make sure!
You can consolidate with ANY loan company...look for bonuses like interest rate deductions for automatic payments and so forth. Don't listen to the SallieMae corporate ***** (unless it is actually a good deal).
finaid dot org is a great site for all your questions.
at least there's one good thing about the dollar being in the *****!
- FlamboBlumpkin, on 07/04/2008, -0/+1Unfortunately, federal consolidation is no longer an option with private lenders. Recent changes in legislature (last year in October, see Sunshine Act) made these loans almost completely un-profitable. The profit the lenders made from the loans afforded them the ability to give borrowers incentives like cash back, and interest rate reductions. This, coupled with a weakened securities market, means pretty much *all* lenders are out of the consolidation business. And there is little sign of return on that market.
You can still get a federal consolidation loan from the department of education (see ed.gov) but the only benefit they give now is a .25 reduction for auto-debit.
So in a sense, the man actually *is* sticking it to you. You now have no choice but to get a consolidation loan from the government, and the borrower benefits are a thing of the past...
Hope this helps
- FlamboBlumpkin, on 07/04/2008, -0/+1Unfortunately, federal consolidation is no longer an option with private lenders. Recent changes in legislature (last year in October, see Sunshine Act) made these loans almost completely un-profitable. The profit the lenders made from the loans afforded them the ability to give borrowers incentives like cash back, and interest rate reductions. This, coupled with a weakened securities market, means pretty much *all* lenders are out of the consolidation business. And there is little sign of return on that market.
- kookbutt, on 07/04/2008, -0/+7I'm gonna to git me sum of dat edjukashun.
- dakbonsa, on 07/04/2008, -0/+2I have around 27K stafford loan (sub+unsub) + 20K perkins + around 25K private...
so this must be good news since I've been paying 4% interest on the private loan (prime -1%) while the "federal loan" has been ripping me off.
Everyday, I kick myself saying "why did I not go to a public school like University of Mississippi or State University of Mississippi".... - GodelEscherBach, on 07/04/2008, -0/+3I consolidated in 2004 (or was it 2003?) at 2.5%. Also, my understanding is that unsubsidized Stafford loans for the 2008-2009 school year are still at 6.8%, with no drop in sight. . . is that right? I'm asking because I'm returning to grad school after 10 years of working and will need to take out another unsubsidized Stafford in the next few days and it still says 6.8%
- sillywongster, on 07/04/2008, -0/+0Yes, you are right.
"Stafford Loans have a fixed interest rate of 6.8% for loans with a first disbursement after July 1, 2006. (Previously, Stafford Loans had variable interest rates (based on 91-day T-bill rate + 1.7% during school with an additional 0.6% increase upon graduation) capped at 8.25% or less, depending on yearly adjustments.) "
Year - Rate - Subsidized Stafford Loans (Undergrad) - Grad or Unsubsidized
--------------------------------------------------
2007-08 6.8% 6.8%
2008-09 6.0% 6.8%
2009-10 5.6% 6.8%
2010-11 4.5% 6.8%
2011-12 3.4% 6.8%
2012-13 6.8% 6.8%
- sillywongster, on 07/04/2008, -0/+0Yes, you are right.
- se2131, on 07/04/2008, -0/+4Unfortunately for us med school students (and I think grad school students as well, not sure), the rate is fixed at 6.8% for many years to come. Debt load for many of us is gonna be close to $300,000 , I don't understand why the lower rates won't apply to us. I mean, that debt can be manageable if you're a specialist, but it basically rules out primary care as an option for many physicians.
- dagamer34, on 07/04/2008, -0/+2You just HAD to ruin my celebration. =/
- eryximachus, on 07/04/2008, -0/+1You can take out another loan to rent some office space, buy your equipment, and maybe even hire a nurse and secretary! Why stop at $300K??
Live the American Dream!
- se2131, on 07/04/2008, -0/+1Duplicate, sorry
- vawksel, on 07/04/2008, -0/+1Is this good or bad for the economy/stock market? Or no effect?
- sillywongster, on 07/04/2008, -0/+0I'm not sure. Speculation:
To me (non-econ major here) it is a RESULT of the economy/market tanking as the variable loan interest rate is determined by the July 1st T-bill auction whose rates are at historic lows.
I would venture that this is old news to the market...people were talking about this back in Feb/March. - LansingSterling, on 07/04/2008, -0/+1It's good for the bankers their numbers stay up, but not good for the people who are having a hard time paying. so my advice is if can not afford don't take it.
- sillywongster, on 07/04/2008, -0/+0I'm not sure. Speculation:
- evilgourmet, on 07/04/2008, -0/+2Awesome, I can't wait to see what rate I am getting when my loans roll in.
- sillywongster, on 07/04/2008, -0/+0It won't apply unless you lock your variable rate loans into a consolidation loan.
Sorry if you already know that.
- sillywongster, on 07/04/2008, -0/+0It won't apply unless you lock your variable rate loans into a consolidation loan.
- LansingSterling, on 07/04/2008, -1/+3in other news: later this year the FED will start raising interest rates and new people who were just introduced in the world of lifetime debt by taking loans wished they had not.
- sillywongster, on 07/04/2008, -1/+0But when my friend, when? That is the million $ question.
Also, new Stafford loans will have fixed rates (6.8%). Now normal loans is a whole different story...
- sillywongster, on 07/04/2008, -1/+0But when my friend, when? That is the million $ question.
- chenley1, on 07/04/2008, -0/+3Did anyone read the article???? Fixed rate loans will continue to drop to 3.4% in 2011
- JorgeGonzalez, on 07/04/2008, -0/+2My girlfriend was denied her loan today after years of acceptance, putting us in a major bind with classes less than a month away.
Best resource for finding another lender?- se2131, on 07/04/2008, -0/+1I don't think you ... can... get denied for a Federal Stafford Loan. You should be able to take out unsubsidized loans to whatever limit it is per year, and subsidized loans are dependent on your economic need. But they don't run a credit check or anything, they just need the FAFSA
- se2131, on 07/04/2008, -0/+1I don't think you ... can... get denied for a Federal Stafford Loan. You should be able to take out unsubsidized loans to whatever limit it is per year, and subsidized loans are dependent on your economic need. But they don't run a credit check or anything, they just need the FAFSA
- renemartini, on 07/04/2008, -0/+0Yeah the government sees you getting an education to land a higher paying job so for 50-60 years of your life to tax you more (like buying a house tax). But reading from everyone here I really got lucky on my loans, my personal was 2% and I payed it all in a year with strict budgeting.
- rowlodge, on 07/04/2008, -0/+2sallie mae loan management site is down tonight.
- kurtwoodfin, on 07/04/2008, -0/+1What they don't tell you. If you have consolidated and you are out of school....this does not apply to you. Also, when you consolidated your loans they take an average or they use to do it that way. I hate these headlines because they are misleading!
- bxblox, on 07/04/2008, -0/+2Check out the Federal Student Aid website : http://www.dl.ed.gov/
The outage message doesnt even make sense. - lukemann, on 07/04/2008, -0/+1It's nice that the same government that lets H1B visa holders who get their education for a pittance of what we pay lets you have a break on the 60k that you owe in order to compete with them. How does it even pay to go to college in the US and pay 15k+ year to compete with someone from India or China who probably paid 3k total for their education. You're staring out at least 60k in the hole to compete with someone who is willing to work for less. The best part is the Doctors who are 100s of thousands in the hole who get to compete with the foreign doctors who may have even gotten a free education.
- scamper22, on 07/04/2008, -0/+1I don't know. I'm Canadian and our tuition for public universities seems about the same as those in the states.
Now if you want to go to Harvard or something... that's your own perogative to waste your own money.
Tuition at University of Waterloo for Engineering = $5000 per 4 months
Tuition at University of Texas (Austin) = $4500 per 4 months
I only looked into U of Texas (austin) as I was interested in grad school there.
I suspect other US public school would have similar tution.
combine that with getting a great university education, access to coop... its decent.
And spare me the doctor in poverty. Doctors in the US are more than compensated for their work...especially compared to the rest of the world. A family doctor must make at least 150-200k per year. Even if they're 300k in debt, living modestly for a few years (on the level of say a 50k salary), they can pay it off in a few years.. then they're chillen.- lukemann, on 07/04/2008, -0/+1I think if you would have read my comment you would know that I'm not talking about Canada. I'm talking about the people who graduate from Sanjiv's no name school in India with a degree that probably took them only 2 years to get. Something similar to a ITT Tech hear in America. Then they come over hear to compete with US trained engineers who attended a 4 year university which they paid out the nose for. It doesn't matter how much US Doctors are compensated what's matters is that there is a Global market for labor, but not a global market for education. If Inida and China want to send people here to work then our students should be free to go there to get their subsidized educations.
- scamper22, on 07/04/2008, -0/+1I don't know. I'm Canadian and our tuition for public universities seems about the same as those in the states.
- wfiupublicradio, on 07/04/2008, -1/+3Did no one pick up on the fact that this is a spammy SEO press release for a student loan company? check the links in the article...they're all pointing to the distributor of the press release with anchor text like "student loan" "college loan" "private student loans", etc. I'm surprised they didn't include some links to "buy viagra" or maybe "discount mortgages"
- Super6, on 07/04/2008, -0/+2Guess I need to hurry up and get myself a loan so I can invest in something, 4% is a good rate, and since the bad math tax (lotto) pays for scholarships in Florida to anyone who'll do 75 hours of community service and get some mediocre SAT scores, it's not like I'll actually need the money for college.
- 8ight, on 07/04/2008, -0/+2Damn, we pay ours off this pay check on July 10th. We're about 3 years early on getting that debt clearned. I'm not going to let this news ruin my happiness once I push that submit button next week though.
- UheardItHear, on 07/04/2008, -1/+1I wonder if now is the time to buy FMD... student loan season is coming up!
- chuk1, on 07/04/2008, -0/+1Good idea man i really like it http://sellyourhousefastnew12.blogspot.com/2008/07 ...
- iluvhatemail, on 07/04/2008, -0/+1https://loanconsolidation.ed.gov/appentry/appindex ...
that is the official application link that I got off of Marketplace.org - Fubarepublic, on 07/04/2008, -0/+0Students pay interest on loans for education? Fark! The rich do have you all by the nuts don't they!
- aldrichnichol, on 07/08/2008, -0/+0 Siemens (NYSE:SI) announced today that it is cutting 16,750 jobs worldwide, which is about 4.2% of its global workforce.For more details try logging in at http://www.smallcappulse.com/index.php/commentary/ ...
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