Consolidate Student Loans

Physician's Money Digest, January31 2004, Volume 11, Issue 2

The interest rates on student loans are recalculated every year on July 1. This year, the rate on Stafford loans, the most common type of student loan, drops to 3.375%, slightly lower than last year's rate of 3.5%. Those who consolidate student loans after July 1 can lock in these low rates for the life of the loan. In past years, this hasn't always been the best financial move, since rates have continued to tumble each year. This year, however, with higher interest rates almost a sure thing for the future, consolidation is worth a look. It may be especially important for graduates of private medical schools, who typically leave school with more than $107,000 in accumulated student loan debt, according to a study by the National Association of Student Financial Aid Administrators. For more information, contact the Department of Education's Office of Federal Student Aid (800-557-7392; www.loanconsolidation.ed.gov).—Michael Sheehan