Loan Refinancing is Important as Federal Government Raises Interest Rates on Federal Student Loans
Long-anticipated legislation signed by President Bush raises interest rates on student loans starting July 1. The bill is a deficit-reduction bill that will cut $11.9 billion from the federal student loan program over the next five years. With college tuitions rising, students are being forced to take on more student loans as the cost of a college education and college loans will become more expensive. College graduates with outstanding school loans should consider refinancing their student loans.
Changes in the Act Affect Student Loan Refinance
The act eliminates in-school and “super-two-step” refinance programs – Currently, Direct Loan borrowers may refinance any eligible college loans that have been fully disbursed even if the borrowers have not yet entered a repayment or grace period (i.e., the student borrower may still be in their in-school period when refinancing). The “super two-step” was the ability of students to refinance a consolidation loan by consolidating out of Federal Family Education Loan Program (FFELP) into Direct Lending, then back out of Direct Loans to a Federal Family Education Loan Program (FFELP) loan.
Federal Government Helps College Graduates Refinance Student Loans
To make sure you repay student loans, you can consolidate or refinance them into one much lower payment. Take advantage of this 100% free program and drastically reduce your student loan payments. Click here to see if you qualify.
What is Student Loan Refinancing and How Does Refinancing Help Pay for College Loans?
A Refinance loan is just what it sounds like: You can take two or more outstanding loans and refinance them into one. As with the Stafford Loans, there are both Direct and FFEL refinance programs. To a college grad swamped with multiple student loans that have come due, loan refinancing is an enticing option. When you refinance, a lending institution pays off your existing balances and replaces them with a new, consolidated loan.
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