In-school Refinancing for Pregraduates

Physician's Money Digest, November 2005, Volume 12, Issue 15

Wall Street Journal

The bad news:

Until recently, students had to wait untilgraduation or while in a 6-month graceperiod during after-college life to consolidatetheir variable education loans fromdifferent sourcesinto a single, fixedrate. According toan article in the,college financialaid experts,pointing to a loopholein the HigherEducation Act, argued that students couldbegin repaying their loans while in school sothat they could become eligible to consolidatebefore they don a cap and gown. TheDepartment of Education agreed, and nowstudents can take advantage of this appealingoption as well as the current rock-bottominterest rates before the ink dries ontheir diploma. Unfortunatelyfor those students who did not consolidate,student loan rates did increase in July by2%. Stafford loan repayment rates are currently5.3% through June 2006. Projectionsfor 2006-2007 are 6.24%.