Upward interest adjustment on some student loans

The Department of Education has announced the interest rates on variable-rate student loans for the period July 1, 2007 to June 30, 2008. Interest rates will bump up by 0.06% from the rates in place July 1, 2006 to June 30, 2007.

For loans first disbursed between July 1, 1998 and June 30, 2006, the rates on Stafford loans are 6.62% while in school, and 7.22% in repayment. The PLUS loan rate becomes 8.02%.

The increase in rates means there may be some benefit to borrowers in consolidating their variable-rate loans before July 1, 2007.

Loans disbursed after June 30, 2006 are subject to fixed rates of 6.80% (Stafford), 7.90% (Direct PLUS), or 8.50% (FFEL PLUS).
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