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Great news for those of you with student loans! On July 1, the interest rates on Stafford loans and PLUS loans will drop to an all time low!
Here’s what the new rates will look like:
This is great news for those of you who missed consolidating 5 years ago when you could get a rate as low as 2.77%. (We locked ours in at 3% with Utah Higher Education Assistance Authority (UHEAA) and used it for our house, which is much cheaper than any mortgage.)
You can consolidate at Federal Direct Loan Consolidation to lock in the rate, but the rates are only good if you got your loans before July 1, 2006. There are lots of other exceptions, too, so read the fine print. Student loan interest will be reported on form 1098.
In addition, on July 1, the College Cost Reduction and Access Act law will cap student loans at 15% of adjusted gross income. Loans are dropped completely with 10 years of public service.