From http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=8353816&pageNumber=0

WASHINGTON (Reuters) - College graduates this spring have an extra reason to toss those mortarboards gleefully into the air. They will be able to repay their loans with the lowest interest rates in recent years.

But they'll have to act fast.

Newly graduating students who apply to consolidate those loans before July 1 will be able to lock in a rate of 2.88 percent, and some lenders offer incentives that could lower that even more.

On July 1, rates will change, and they could go as high as 5 percent.

"Students need to realize that they must act quickly this year" said Mary Montiel of Collegiate Funding, a San Diego student lending company (http://www.collegiatefunding.com).

Borrowers who have been out of school for more than six months can consolidate and reap low rates, too. They will face a slightly higher rate of 3.38 percent if they sign up before July 1, because they've already missed out on the extra 0.5 percentage point break that new graduates get.

Those rising rates are reason enough to lock in those loans now, but there is another: Congress is set to fiddle with the student loan program and it is possible that the whole fixed rate re-fi will go out the window by the time it is done.

Here's what you need to know now.

-- The savings are significant. Consolidating a $20,000 student debt can save you at least $81 a month, and that's likely to improve in the years to come. The more you've borrowed, the more you can save and the longer you can stretch out your repayments. Check the calculator at Student Loan Consolidator (http://studentloanconsolidator.com) or the chart at Sallie Mae (http://salliemae.com), two lenders that offer consolidation loans.

-- Act quickly. If you don't get your paperwork started before July 1, you're out of luck.

-- Most lenders offer even better deals than the 2.88 percent rate, which is a base. They'll take away another 0.25 percentage points if you agree to make your payments by electronic transfer from your checking account. Then, if you make every payment on time for three years (and that's pretty easy to do if your payments are automatic), they'll slice another whole percentage point off your rate. Within three years you could be looking at a long-term loan with a locked in rate of 1.6 percent. It's hard to imagine a 2008 economy in which that wouldn't look terrific.

-- Your school's financial aid office can recommend some lenders, and you can shop online at a host of student loan sites, including those mentioned elsewhere in this column. The Education Department also offers direct consolidation loans at http://loanconsolidation.ed.gov. If all of your loans already are with the same lender, you'll be required to use that lender for your consolidation loan.

Look for lenders that offer all of those price breaks as well as easy service, and repayment options like stretched out terms and low initial payments (for while you're job hunting). But don't knock yourself out comparison shopping; many of the terms and conditions of student loans are set by law and regulation, they don't vary all that much from lender to lender.

-- Follow the exact steps that your new lender gives you. For example, if you've already been having your payments deducted from your checking account, you might have to re-enroll to get that 0.25 percentage point credit.

-- Parents can consolidate PLUS loans too. Their rates are higher -- 4.75 percent -- but that's still a good deal to lock in now, as those rates will rise on July 1, too.

Once you've nailed your new loan, you can start job hunting. Tell prospective employers that you were smart enough to save hundreds -- or thousands -- on your college loans and that you'll put the same savvy to work for them.

If I see where this is going, how about a survey?

I'll start it.

I owe $93,000.00, 30 year payment plan, $385/month.

Beat that!

Quoteowe $93,000.00, 30 year payment plan, $385/month.

Damn, I thought I was bad off with $20,000. Although my partner also has about $30,000 in loans, so together we're kind of screwed.  Let me guess, law school?  :dunno:

Bingo.


$30,000 is pretty strong though.

My wife has 20,000
as for me.... Mom worked at the university, NO DEBT  

Wow im SOO glad i havent had to take out a student loan... I should be graduating from my JC next semester...then off to the big times (UC).

i got over the 110,000 mark.  3 years x 30k, + 20,000 from current, + wife.......

IM SCREWED.

What school did you do all that at?