In February of 2006, congress, with all their wisdom, passed a deficit-reduction bill that cut twelve billion dollars from student loan programs. Congress also had already approved a steep interest rate hike for Stafford loans, used by nearly ten million students each year. The rate increases took effect July 1st, 2006.

Students graduating in December of 2006 will be facing interest rates as high as 7.14% instead of the much lower interest rates four years earlier. We here at Student Financial Advisors are sympathetic to student facing this dilemma. Considering that the average American student will graduate owing approximately 30,000 dollars in various student loans, we feel the best option for students and the parents of students is to consolidate student loan debt.

Our suggestion is to consolidate student loans while in the six month grace period. Most students don’t realize how important it is to consolidate during their grace period. Students can take advantage of an extra .60% rate reduction on there consolidation loan, because the effective interest rate during grace period is that much less, this in turn carries over to the consolidated student loan.

Student loan consolidation can significantly lower your monthly payment by lengthening the term of your loans, with no prepayment penalties. By getting the students payments as low as possible the student is free to pay extra into the principle and thus effectively paying off the loan quicker.

When you consolidate student loan debt with Student Financial Advisors you are also eligible for our barrower benefits package, can take an additional 1.25% off of the students effective interest rate.

Rate incentives break down like this:

.60 percent for consolidating while in your grace period.

.25 percent for signing up for automatic bill pay, in other words the monthly payment is automatically deducted from your checking account.

1% one full percentage point after thirty six (36) on time monthly payments or three years. If the student signs up for the automatic bill pay, they should make the thirty six on time payments.

Once, you consolidate student loans your repayment period can be stretched out to as much as 30 years, for larger loans. For loans of 20,000 dollars or less the repayment period is fifteen years, for loans with a balance of less then 40,000 dollars the repayment period is twenty years, for less then $60,000 the repayment period is as much as 25 years, and for 60K plus it can go as long as thirty years. We stress again there is no pre-payment penalties and you can pay your loan off at any time.