Hi 81 / Lo 73
|Volume 71, Issue 147,
Thursday, June 29, 2006
Don't put finances on hold
On Saturday, the already daunting task of paying back student loans will become even more intimidating.
The interest rates on Stafford loans will increase to 6.54 percent from the current rate of 4.7 percent, a change that could result in students having to pay back thousands of dollars more when they graduate.
That impending change has students and parents alike rushing to consolidate loans at current rates, clogging phone lines and Web sites. One major student loan holder had 15 calls coming in per second, The Associated Press reported.
That number is too high.
Whether consolidating your student loans is a good thing for every student to do is complicated, but without a doubt, every student should consider it. In part because they lose that option when the rate increases; on Saturday, students can no longer consolidate their loans until after they graduate.
But 15 calls per second is too many calls because some of those people should have consolidated already. Instead of keeping up to date with something tied so tightly to their financial futures and refinancing as soon as the rate increase was announced, students have been put in a panic by newspaper headlines and last-minute coverage.
We understand the importance of watching the news, but we also understand the importance of balancing a checkbook. Students who are smart enough to avoid the credit card shenanigans over at the University Center on any given Thursday might think that they're doing well when it comes to finances in college, but it looks like it takes more than giving out a fake Social Security number for free pizza to survive.
Sure, payments on student loans can be deferred while the student is attending school, and some loans have a grace period after graduation, but that doesn't mean that the loan sharks looking to take advantage of students aren't setting a few booby traps while the fish are in class.
Today and Friday are the last days to talk to advisers
to find out if consolidation is the right choice for you. It will be worth
all the time on hold.
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