Alumni
Student Loan Consolidation is a Solution
to Rising Interest Rates for Red Raiders
Texas Tech students nearing graduation should take note of the recent United States Treasury Bill (T-bill) auctions, which drive student loan interest rates. If trends continue as expected, students could expect an increase of as much as 60 percent when rates are reset on July 1, 2005.
A new Tech graduate with $20,000 worth of student loans and a 20-year term would rack up an additional $4,371 in interest over the life of the loan if subject to this year�s projected interest rate increase. Consolidating those loans before July 1, 2005, at the current rate of 2.875 percent could save eligible borrowers thousands of dollars.
"For graduating seniors the next few weeks will be hectic," says Bill Dean, TTAA Executive Vice President and CEO. �However, it is important that they find a few minutes to learn about student loan consolidation before rates change. With a little extra time, students can save thousands of dollars.�
Through consolidation, Red Raiders can combine multiple federal student loans, such as Stafford loans, into one loan with one low monthly payment. The consolidation loan fixed interest rate is determined by taking the weighted average of the interest rates of the original federal student loans, rounded up to the nearest 1/8 percent.
Nelnet, the Texas Tech Alumni Association student loan consolidation partner, is allowing new graduates who apply to consolidate immediately after graduation to keep their six-month grace period. This gives them the opportunity to capture the current low rate without forfeiting their six-month grace period before they begin repayment.
In addition, Nelnet offers valuable benefits to borrowers, including a choice of a one percent interest rate reduction after 36 consecutive, uninterrupted payments or a 3.33 percent reduction to loan principal applied after 30 consecutive, uninterrupted payments. Borrowers can also receive a .25% interest rate reduction for auto-debit payments. Together, these Nelnet borrower benefits can save hundreds and possibly thousands of dollars in interest over the life of the loan.
�It is a great debt management tool,� says Dean. �The low rates and one monthly payment are a great combination for new graduates on a tight monthly budget. It is hard to imagine a scenario where a borrower would not benefit from consolidating before July 1.�
More information regarding student loan consolidation is available at http://www.alumniconsolidation.nelnet.net or by calling toll-free at 1.866.426.6765.