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:
- Stafford loans in in-school or grace period status: 2.00%
- Stafford loans in repayment: 2.50%
- PLUS loans: 3.38%
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.
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