Student Loan Rate

Student loan rates are the farthest thing from a scholar's mind when excited about starting a college education, but they do play a part in the available income stream once a career has begun. After a few years of school, most realize how much they are going to owe upon graduation. A student loan rate should be carefully reviewed and any contracts signed should be carefully entered into before a borrower is locked into an extended debt that must be repaid. As wonderful as it is to be able to get the money that is needed for a higher education, interest charges must be considered. The most popular form of lending program is the Stafford financing plan. It is available for both undergraduate and graduate students and requires no credit check or collateral. The popularity and ease of acquiring precludes much thought on the interest charge it requires.

The government has set the Stafford plan at a variable interest rate, meaning that a scholar's student loan rate, while in school, will differ from the interest charge when out of school and ready to repay the balance. While in school and during the six month grace period, the current interest charge is slightly higher than the national interest index. After the grace period, the charge increases by at least 1.5 percentage points. Most importantly to know about the interest charge is that it changes every year on July first. This is based on the 91 day T-bill rate and is capped at a predetermined percent. Being bogged down with several loans and higher student loan rates need not be the disaster it may sound like though. "Then shalt thou call, and the Lord shall answer; thou shalt cry, and he shall say, Here I am." (Isaiah 58:9).

If a scholar is inundated with several forms of borrowed financing at varying student loan rates, there is always the option to consolidate in order to get a lower interest charge and adjust the length of the repayment terms. Federal State Loan Consolidation is a fixed percentage, government guaranteed, no collateral type of financing. The student loan rate on a consolidated source will be the average of accumulated interest percentage points that are being consolidated, rounded off to the nearest 1/8 percent. It's almost impossible to avoid borrowing college money. A higher education is almost mandatory to be able to make an income that can support a family and the costs of tuition far exceed most people's extra income. So if a scholar never gave much thought to their interest charge on the borrowed college money, they can still thoroughly enjoy the fact that they are able to get the education desired, knowing consolidation is an option to lower payments if necessary in the future.