Now that she knows, Augusta State University graduate student Amy Clemons says she might consider trading in her loan payment book.
The 25-year-old Augusta resident said she has been paying 6.9 percent on the $11,500 worth of federal Stafford loans she took out for her undergraduate education.
Starting July 1, interest rates on those loans will drop to 4.06 percent - the lowest rate in the program's history.
"I haven't heard many details about it," Ms. Clemons said. "Now that I know, I'll look into it if I knew where to go for the information."
Financial aid offices at the local universities have been trying to get the word out to students and recent graduates that they can lock in the low rates if they decide to consolidate their loans.
They've also cautioned students about the drawbacks of loan consolidation.
"We're encouraging them to take a look at this very carefully to decide if consolidation is the best avenue," said Glenn Shumpert, the director of USC Aiken's financial aid office.
"You do lose some of the benefits, such as deferment."
Still, he said for students with multiple loans or higher rates, consolidation would help them capitalize on the unusually low interest, which began dropping last year as the economy slowed.
The rate drop for Stafford loans, the most popular type of federally guaranteed student loan, applies to loans issued after July 1998.
PLUS loans, or Parent Loans for Undergraduate Students, also will drop from 6.79 percent to 4.86 percent.
The rate on a federal consolidated loan is fixed and locked in for the life of the loan.
"There are a few lenders who are giving a better rate than the federal government," Mr. Shumpert added.
Kevin Wellwood, the director of Augusta State University's financial aid office, said he doesn't believe the rate drop will drastically increase the amount of loans students apply for.
"Those in need of a student loan are generally going to borrow what they need regardless what the rate is," he said. "It's a great rate obviously. Those who need to borrow, will benefit from it."
Phone numbers for local financial aid offices:
Augusta State University: 737-1431
Medical College of Georgia: 721-4901
University of South Carolina Aiken: (803) 641-3476
Reach Vicky Eckenrode at (706) 823-3227 or email@example.com.
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