Student loan consolidation rates to hit 3.25% on clarkhoward.com

There's a lot of tumult in the student loan market right now. Because of fallout from mortgages, many educational lenders are not able to borrow money to service their customers. One lender recently went bust and left students stranded high and dry with their tuition checks bouncing. Other lenders are not even making loans for kids going to college this fall. While this is a problem, it's not the severe crisis you might imagine. The U.S. Department of Education is required to step in and pick up the slack with loans.

Meanwhile, 8 of the top 10 lenders are no longer doing consolidation loans. Yet there's a great opportunity here for those who haven't yet consolidated their loans. Wait until after July 1 and you can fix your rate at 3.25%. That's tremendous.

Just know that trying to secure a loan for next fall will be like going through a funnel. Clark's advice is to start early. Take care not to borrow too much. Doing so can create a back-breaking financial burden in your 20s. Clark advises students to do college on a 3-year or 6-year plan. With the former, you take summer classes and eliminate 1 year of living expenses. With the latter, you work nearly full time and go to college part time. You also pick up great work experience and defray the cost of your loans along the way.

What others are saying

colleg loanconsolidation
Wher can we go to consolidate atthe best interest, even 25 yrs ?
By paul burgess @ 09/28/09 11:27:29 PMreport abuse
McClellan
We would appreciate any direction on consolidating private student loans for our son (we are co-signors) Help!!
By Bonnie @ 09/26/09 01:18:48 PMreport abuse
Private Student Loan Consolidation - where?
Hi,
Any advice on where my son can go to consolidate his private student loans?
By Jean Bauder @ 09/24/09 09:55:03 AMreport abuse
Federal Student Laon Consolidation
Should I pursue consolidation if I already have fixed loans? My rate is @ 6.8%, more than double the rate those going from a variable to a fixed are getting.
By Tim @ 06/14/09 02:08:51 PMreport abuse
STUDENT LOAN CONSOLIDATION
NEED TO CONSOLIDATE STUDENT LOANS...WHERE CAN I OBTAIN SAME?
By JONATHAN CRUZ @ 06/12/09 06:40:11 PMreport abuse
Sorry not so much anymore
just did mine through this website. I currently own 60k, the best they give is 5.9% in my case.. So I had to take the 25 yr offer and looks like I now wil end up paying a grand total of 107K.. Hopefully can get a better job.
By Mike @ 04/16/09 06:34:40 PMreport abuse
Student loan consolidation
My daughter just finished law school and has a good job, but needs to consolidate her private and Federal loans of $170,000. We cannot find anyone to do this. Do you know anyone that is doing this for kids like my daughter? I would really appreciate your advice. Sincerely, Darrell Smith
By Darrell Smith @ 03/09/09 07:32:57 PMreport abuse
student loans
i wish clark would go into more details about consolidating student loans, how to go about this.
By brittany @ 02/18/09 03:50:44 PMreport abuse
Student loan
What website do you recommend to consolidate my student loan. Now I am paying 6.9.
By Lily @ 01/15/09 05:33:17 PMreport abuse
Student loan for career training
Sallie Mae has offered a co-signed loan at an interest rate above 12%. The loan interest for my nine month career training program in massage therapy will nearly equal the principal amount on the 10 year loan. Can anyone suggest a better solution/suggestion?
By Sara @ 01/03/09 09:01:39 AMreport abuse
Sallie Mae Loan Consolidation
I made a terrible error years ago when I consolidated my student loans at 8%. At that time I was extremely ignorant of finances and what consolidation really meant. Well, as you know I am locked in at 8% and can't take advantage of these new lower rates. My wife has been great with some strategies to get the principal down but it drives me crazy thinking of what my payments could be if I could have consolidated at the lower rate. Do yo have any suggestions/strategies to get the loan "refinance" at a substantial lower rate - I have checked everywhere I could think of with no success(i.e. the rates are not better). Thanks for your time.
By William Hevener @ 11/25/08 01:58:51 PMreport abuse
Misapplied Payments
I have been paying my payments on time, Sallie Mae has been cashing the checks but they have not been applying the payments to my account. They now say I am three months behind. I have faxed bank statements to prove this and they will not even acknowledge that they have received them. I cannot get past the CSR (Customer No Service) reps nor the collections people. They have my money and they cannot tell me where it is or why they have not applied the payments to my account.
By John @ 10/22/08 02:53:50 PMreport abuse
Weighted average student loan int rates
I am trying to consolidate my student loans and was hoping to get the low 3.25 rate but am only able to get 6.625 due to the average of my current interest rates. Can I do better than 6.625? Thanks
By Brenda @ 10/21/08 03:00:00 PMreport abuse
Tuition Pay on Sallie Mae
When balancing my check book I thought I had forgotten to record payment, which I don't do and didn't this time either. Upon attempting to pay this month's payment on the website, it had already been paid, hence the duplicate payment. I clicked the contact us button and sent a message requesting an explanation. When the email arrived it was someone else's information. Luckily there isn't an account number in the email. When I called the customer service number in the email, here is the explanation I received. As for the extra payment, the CSR stated I had set up recurring payment, so it was automatically debitted from my account. This wasn't my intention or the way I understood it. My understanding was 'recurring' meant it held the information to make the process easier next time. It never stated or gave the option of 'debitting' my account automatically. As for the email, I was told to disregard it. I did ask they research it. I do get multiple emails from them at one time. I tried to read them, but I remember them just stating either it is time for payment or payment had been made. I will have to go back and see if they say they are debiting my account. I also asked who they were govened by and the statement was 'Sallie Mae Tuition Pay'. In other words, only by themselves. I wish I could pay the tuition in one lump sum, but I can't at this time. So they have me over a barrel as my student's college no longer offers monthly payment plans. I will have to work towards paying lump sums as soon as I can.
By Dawn J @ 10/03/08 05:20:11 PMreport abuse
consolidate credit cards
Who should I trust to consolidate credit cards
By robert @ 09/25/08 10:49:25 AMreport abuse
My school loans
Where can I get more info?
By Kevin Joy @ 08/13/08 05:54:58 PMreport abuse
how can I consoladate all student loans at 3.5%
This sound to good to be true! What website do I go to, to get this great deal? My daughter just graduated and we need to consoladate the Stafford and private loans into one loan! Like others - Where do I access this?
By Jayne @ 07/12/08 10:17:22 AMreport abuse
student loan consolidation
I would like to consolidate 3 loans into one. Do I fillout and have an application ready to submit on July 1 for the 3.25% rate or can I do it now?
By peggy @ 06/26/08 11:41:00 AMreport abuse
Recommended Student Loan Lenders
Clark, do you have any recommendations on lenders to use for student loans? I am going to need to borrow more than $10,000 just for one year. Also, how much should my interest rate be?
By Christy Bouffard @ 06/23/08 05:11:40 PMreport abuse
student loans, interest rate
My student loan rate is over 8%. I have graduated in '97 and have not been able to pay these off. I work as a part time teacher, with students below the poverty line. Anyway, I have yet to consolidate. I am know waiting o a lower rate. What will the new rates be for someone with old loans?
By diane travis @ 06/13/08 01:34:57 PMreport abuse
Student Loan Consolidation
I was advised when I consolidated my considerable student loans (BA, MA and doctorate) several years ago to "hold out" one small loan from the consolidation so I can "reconsolidate" at a lower rate when the opportunity arises. Looks like that may be coming up July 1st - I am currently at about 3.6% and think maybe I should go ahead and get the other loan into the consolidation at the 3.25% rate. Is that the best idea? I'm not sure whether rates are likely to go any lower for a while to come. I have about $280,000 in loans so I think a little can mean a lot in terms of interest savings.
By Nancy Smith @ 05/16/08 12:50:55 PMreport abuse
STUDENT LOAN CONSOLIDATION
AFTER JULY 1, YOU CAN FIX YOUR RATE AT 3.25%!!!! IS THIS TRUE? WHO DO I NEED TO CONTACT TO MAKE SURE THIS HAPPENS? I HAVEN'T CONSOLIDATED YET AND JUST GRADUATED. I HAVE ABOUT 25k IN LOANS. ANY HELP OUT THERE?
By David @ 05/06/08 11:54:25 AMreport abuse
Accurate Information
According to http://ifap.ed.gov, the interest rate for Federal Consolidation Loans is, "The interest rate is the weighted average of the interest rates on the loans being consolidated, rounded to the nearest higher 1/8th of one percent. The interest rate may not exceed the maximum rate." (The maximum rate is 8.25%.) Nothing will change on July 1, 2008, other than interest rates for new Subsidized Stafford Loans will drop to 6%. I believe Mr. Howard may have been confused by the College Cost Reduction and Access Act that will reduce interest rates for Subsidized Stafford loans on a sliding scale over the next 4 years. Eventually the rate will be 3.4% for loans disbursed between July 1, 2011 and June 30, 2012. This may eventually reduce the interest rate slightly for those who Consolidate their student loans 4-5 years from now by reducing the interest rate for a portion of their overall loan balance, thereby reducing the weighted average. Sorry to be the bearer of bad, but more accurate news.
By Jennifer @ 04/22/08 02:16:25 PMreport abuse
What Changes
Like Mike, I am unaware of what will change. Anywhere we can get more info?
By Rob @ 04/21/08 04:44:20 PMreport abuse
sallie mae
Clark, my current interest rate for 39,000 of student loan debt is 7%. i graduated in December, and have one more loan to consolidate. Is there any advice you can offer me to get a lower consolidation rate?
By sarah websetr @ 04/21/08 04:42:02 PMreport abuse
private loans
I take it this rate is only for federal loans, not private loans?
By Steve @ 04/21/08 01:01:03 PMreport abuse
Student Loans
THIS IS GREAT! SALLIE MAE is a @#$%#^%!!! I pay may loans on time ALL the time (it is debited from my account) and they are always raising my interest rate for NO GOOD REASON! I wish I could do it now.
By Leslie @ 04/21/08 10:35:12 AMreport abuse
Consolidation tips
My wife and I finished school in 2005 and we consolidated our loans with program, separately of course. Definitely need to check various programs for deductions on rates. With the program we have our rates were reduced after consolidation by 1.25% for automatic deductions, and another 1 or 2% after 48 months of on time payment. Which is easy with automatic deductions. My wife's loans will be in the low 2% range in another year, while mine will be mid 1%. No kidding!! A significant portion of her loans were over 8%. By the way, I worked very hard with the student financial clinic on campus my last year to get it to work out this way! Lots of research. Use the resources available to you!
By Joel @ 04/19/08 09:56:51 AMreport abuse
Weighted average?
From my understanding, when you consolidate student loans, your rate becomes the weighted average of your existing loans (minus some discounts). Since my current unconsolidated loan rates aren't changing, I'm confused about what exactly is changing on July 1 that lets me get a lower interest rate.

This page basically explains my current understanding: http://www.finaid.org/loans/consolidation.phtml
By Mike @ 04/18/08 06:22:47 PMreport abuse

colleg loanconsolidation

Wher can we go to consolidate atthe best interest, even 25 yrs ?

By paul burgess @ 09/28/09 11:27:29 PMreport abuse

McClellan

We would appreciate any direction on consolidating private student loans for our son (we are co-signors) Help!!

By Bonnie @ 09/26/09 01:18:48 PMreport abuse

Private Student Loan Consolidation - where?

Hi,
Any advice on where my son can go to consolidate his private student loans?

By Jean Bauder @ 09/24/09 09:55:03 AMreport abuse

Federal Student Laon Consolidation

Should I pursue consolidation if I already have fixed loans? My rate is @ 6.8%, more than double the rate those going from a variable to a fixed are getting.

By Tim @ 06/14/09 02:08:51 PMreport abuse

STUDENT LOAN CONSOLIDATION

NEED TO CONSOLIDATE STUDENT LOANS...WHERE CAN I OBTAIN SAME?

By JONATHAN CRUZ @ 06/12/09 06:40:11 PMreport abuse

Sorry not so much anymore

just did mine through this website. I currently own 60k, the best they give is 5.9% in my case.. So I had to take the 25 yr offer and looks like I now wil end up paying a grand total of 107K.. Hopefully can get a better job.

By Mike @ 04/16/09 06:34:40 PMreport abuse

Student loan consolidation

My daughter just finished law school and has a good job, but needs to consolidate her private and Federal loans of $170,000. We cannot find anyone to do this. Do you know anyone that is doing this for kids like my daughter? I would really appreciate your advice. Sincerely, Darrell Smith

By Darrell Smith @ 03/09/09 07:32:57 PMreport abuse

student loans

i wish clark would go into more details about consolidating student loans, how to go about this.

By brittany @ 02/18/09 03:50:44 PMreport abuse

Student loan

What website do you recommend to consolidate my student loan. Now I am paying 6.9.

By Lily @ 01/15/09 05:33:17 PMreport abuse

Student loan for career training

Sallie Mae has offered a co-signed loan at an interest rate above 12%. The loan interest for my nine month career training program in massage therapy will nearly equal the principal amount on the 10 year loan. Can anyone suggest a better solution/suggestion?

By Sara @ 01/03/09 09:01:39 AMreport abuse

Sallie Mae Loan Consolidation

I made a terrible error years ago when I consolidated my student loans at 8%. At that time I was extremely ignorant of finances and what consolidation really meant. Well, as you know I am locked in at 8% and can't take advantage of these new lower rates. My wife has been great with some strategies to get the principal down but it drives me crazy thinking of what my payments could be if I could have consolidated at the lower rate. Do yo have any suggestions/strategies to get the loan "refinance" at a substantial lower rate - I have checked everywhere I could think of with no success(i.e. the rates are not better). Thanks for your time.

By William Hevener @ 11/25/08 01:58:51 PMreport abuse

Misapplied Payments

I have been paying my payments on time, Sallie Mae has been cashing the checks but they have not been applying the payments to my account. They now say I am three months behind. I have faxed bank statements to prove this and they will not even acknowledge that they have received them. I cannot get past the CSR (Customer No Service) reps nor the collections people. They have my money and they cannot tell me where it is or why they have not applied the payments to my account.

By John @ 10/22/08 02:53:50 PMreport abuse

Weighted average student loan int rates

I am trying to consolidate my student loans and was hoping to get the low 3.25 rate but am only able to get 6.625 due to the average of my current interest rates. Can I do better than 6.625? Thanks

By Brenda @ 10/21/08 03:00:00 PMreport abuse

Tuition Pay on Sallie Mae

When balancing my check book I thought I had forgotten to record payment, which I don't do and didn't this time either. Upon attempting to pay this month's payment on the website, it had already been paid, hence the duplicate payment. I clicked the contact us button and sent a message requesting an explanation. When the email arrived it was someone else's information. Luckily there isn't an account number in the email. When I called the customer service number in the email, here is the explanation I received. As for the extra payment, the CSR stated I had set up recurring payment, so it was automatically debitted from my account. This wasn't my intention or the way I understood it. My understanding was 'recurring' meant it held the information to make the process easier next time. It never stated or gave the option of 'debitting' my account automatically. As for the email, I was told to disregard it. I did ask they research it. I do get multiple emails from them at one time. I tried to read them, but I remember them just stating either it is time for payment or payment had been made. I will have to go back and see if they say they are debiting my account. I also asked who they were govened by and the statement was 'Sallie Mae Tuition Pay'. In other words, only by themselves. I wish I could pay the tuition in one lump sum, but I can't at this time. So they have me over a barrel as my student's college no longer offers monthly payment plans. I will have to work towards paying lump sums as soon as I can.

By Dawn J @ 10/03/08 05:20:11 PMreport abuse

consolidate credit cards

Who should I trust to consolidate credit cards

By robert @ 09/25/08 10:49:25 AMreport abuse

My school loans

Where can I get more info?

By Kevin Joy @ 08/13/08 05:54:58 PMreport abuse

how can I consoladate all student loans at 3.5%

This sound to good to be true! What website do I go to, to get this great deal? My daughter just graduated and we need to consoladate the Stafford and private loans into one loan! Like others - Where do I access this?

By Jayne @ 07/12/08 10:17:22 AMreport abuse

student loan consolidation

I would like to consolidate 3 loans into one. Do I fillout and have an application ready to submit on July 1 for the 3.25% rate or can I do it now?

By peggy @ 06/26/08 11:41:00 AMreport abuse

Recommended Student Loan Lenders

Clark, do you have any recommendations on lenders to use for student loans? I am going to need to borrow more than $10,000 just for one year. Also, how much should my interest rate be?

By Christy Bouffard @ 06/23/08 05:11:40 PMreport abuse

student loans, interest rate

My student loan rate is over 8%. I have graduated in '97 and have not been able to pay these off. I work as a part time teacher, with students below the poverty line. Anyway, I have yet to consolidate. I am know waiting o a lower rate. What will the new rates be for someone with old loans?

By diane travis @ 06/13/08 01:34:57 PMreport abuse

Student Loan Consolidation

I was advised when I consolidated my considerable student loans (BA, MA and doctorate) several years ago to "hold out" one small loan from the consolidation so I can "reconsolidate" at a lower rate when the opportunity arises. Looks like that may be coming up July 1st - I am currently at about 3.6% and think maybe I should go ahead and get the other loan into the consolidation at the 3.25% rate. Is that the best idea? I'm not sure whether rates are likely to go any lower for a while to come. I have about $280,000 in loans so I think a little can mean a lot in terms of interest savings.

By Nancy Smith @ 05/16/08 12:50:55 PMreport abuse

AFTER JULY 1, YOU CAN FIX YOUR RATE AT 3.25%!!!! IS THIS TRUE? WHO DO I NEED TO CONTACT TO MAKE SURE THIS HAPPENS? I HAVEN'T CONSOLIDATED YET AND JUST GRADUATED. I HAVE ABOUT 25k IN LOANS. ANY HELP OUT THERE?

By David @ 05/06/08 11:54:25 AMreport abuse

Accurate Information

According to http://ifap.ed.gov, the interest rate for Federal Consolidation Loans is, "The interest rate is the weighted average of the interest rates on the loans being consolidated, rounded to the nearest higher 1/8th of one percent. The interest rate may not exceed the maximum rate." (The maximum rate is 8.25%.) Nothing will change on July 1, 2008, other than interest rates for new Subsidized Stafford Loans will drop to 6%. I believe Mr. Howard may have been confused by the College Cost Reduction and Access Act that will reduce interest rates for Subsidized Stafford loans on a sliding scale over the next 4 years. Eventually the rate will be 3.4% for loans disbursed between July 1, 2011 and June 30, 2012. This may eventually reduce the interest rate slightly for those who Consolidate their student loans 4-5 years from now by reducing the interest rate for a portion of their overall loan balance, thereby reducing the weighted average. Sorry to be the bearer of bad, but more accurate news.

By Jennifer @ 04/22/08 02:16:25 PMreport abuse

What Changes

Like Mike, I am unaware of what will change. Anywhere we can get more info?

By Rob @ 04/21/08 04:44:20 PMreport abuse

sallie mae

Clark, my current interest rate for 39,000 of student loan debt is 7%. i graduated in December, and have one more loan to consolidate. Is there any advice you can offer me to get a lower consolidation rate?

By sarah websetr @ 04/21/08 04:42:02 PMreport abuse

private loans

I take it this rate is only for federal loans, not private loans?

By Steve @ 04/21/08 01:01:03 PMreport abuse

Student Loans

THIS IS GREAT! SALLIE MAE is a @#$%#^%!!! I pay may loans on time ALL the time (it is debited from my account) and they are always raising my interest rate for NO GOOD REASON! I wish I could do it now.

By Leslie @ 04/21/08 10:35:12 AMreport abuse

Consolidation tips

My wife and I finished school in 2005 and we consolidated our loans with program, separately of course. Definitely need to check various programs for deductions on rates. With the program we have our rates were reduced after consolidation by 1.25% for automatic deductions, and another 1 or 2% after 48 months of on time payment. Which is easy with automatic deductions. My wife's loans will be in the low 2% range in another year, while mine will be mid 1%. No kidding!! A significant portion of her loans were over 8%. By the way, I worked very hard with the student financial clinic on campus my last year to get it to work out this way! Lots of research. Use the resources available to you!

By Joel @ 04/19/08 09:56:51 AMreport abuse

Weighted average?

From my understanding, when you consolidate student loans, your rate becomes the weighted average of your existing loans (minus some discounts). Since my current unconsolidated loan rates aren't changing, I'm confused about what exactly is changing on July 1 that lets me get a lower interest rate.

This page basically explains my current understanding: http://www.finaid.org/loans/consolidation.phtml

By Mike @ 04/18/08 06:22:47 PMreport abuse

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Apr 18, 2008 -- Student loan consolidation rates to hit 3.25%

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