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Joseph Hurley, who writes the College Money Guru
advice column for Bankrate.com, will be answering questions
all this week for people who want to know more about
student loan consolidation. Ask
your question here.
 Dear
College Money Guru,
If I already have an existing consolidation loan, under
the Direct Loans program, can I convert it to a fixed-rate
consolidation loan before July 1?
-- Javed
 Dear
Javed,
Absolutely! If you last consolidated prior to February
1999, your existing Federal Direct Consolidation Loan
is a variable-rate loan, and the interest rate is scheduled
to increase by almost 2 percent on July 1. You can lock
in a fixed rate by applying for a new consolidation
loan at loanconsolidation.ed.gov.
But hurry, your application must be in by midnight on
June 30. The interest rate on your new consolidation
loan will be your current rate rounded up to the nearest
one-eighth of 1 percent.
Borrowers with an existing federal consolidation
loan under the Federal Family Education Loan (FFEL)
program already have a fixed-rate loan and don't have
to concern themselves with the June 30 deadline. However,
if they also have an eligible variable-rate loan, such
as a Stafford loan, they should consider consolidating
as well. The two (or more) loans can be combined into
one new consolidation loan at a fixed rate based on
the weighted average of the interest rates of the loans
being consolidated. FFEL borrowers can shop the various
FFEL lenders for the best consolidation loan deal, since
some terms can vary.
Answers for:
Life
after locking in a rate
Combining
graduate and undergraduate loans
Joseph Hurley, who writes the College
Money Guru column for Bankrate and founded savingforcollege.com,
will be answering extra questions this week as the June
30 deadline approaches for consolidating student loans
at a low rate.
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