Not Consolidated -- Will Graduate By June 30th 2006:

Although rates increased by nearly two percentage points on July 1st 2005, the first in five years and the largest one-year rise in the 40-year history of the Federal loan program, it’s still a good time and a smart financial move to lock in current low rates before the next anticipated rate increase on July 1st 2006 and legislative changes take effect. The Prime Rate, the interest rate charged by banks to their most creditworthy customers, usually the most prominent and stable business customers, is 7.25% as of January  2005.  The current in-school, grace and deferment period interest rate for most Federal Stafford loans is 4.70%.  This Post July 1st 2005 interest rate automatically and without notice will increase 0.60% to 5.30% at the end of your six-month grace period following graduation.  If this six-month period falls beyond the annual July 1st rate reset date the prevailing in-repayment rate will apply as well as any adopted legislative changes to the programs.  If you wait until the expiration of your six-month grace period to consolidate, the Post July 1st 2005 consolidation interest rate will increase from 4.750% to 5.375% a 0.675 percentage point (13.16%) increase, which can cost nearly $14,000 in additional interest payments on a full-term $100,000 loan.  If you wait until July 1st 2006 to consolidate, you are leaving yourself vulnerable to any interest rate or legislative changes to the program.  As such, you should pay close attention and be mindful of the following dates and timeframes when completing your consolidation application:

For more information and to discuss your options, contact an Meharry Loan Consolidation Program personal consolidation counselor at 1-800-741-4704. Be sure to reference Meharry when you call.