Released: July 01, 2008

Student loan changes good for borrowers

Source: Sandra Block, USA Today

Like your driver’s license and your high school diploma, your first student-loan payment is one of those milestones that mark the journey from youth to adulthood. But if you graduated with lots of debt, this milestone may make you nostalgic for the days when you wore pull-up pants.

Fortunately, a raft of changes that will take effect Tuesday will make student loans less onerous for many borrowers. Here’s a look at the changes:

• Interest rates on unconsolidated student loans issued before July 1, 2006, will drop to 4.21% from 6.62% for the in-school and grace period and from 7.22% for loans already in repayment. Loans issued before July 1, 2006, carry variable rates that are adjusted every July 1. If you’re repaying these loans, consolidating them will lock in a rate of 4.25%. If you recently graduated and are still in your grace period — the six-month window before you have to start making payments — you can lock in a rate of 3.61%.

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Keywords

Student Loans, Education Loans, Credit