Today I was talking with one of my interns who recently graduated from college and is concerned about finding a job and being able to pay off her student loans.   I told her that one way to lower her payments and save some money would be to consolidate her loans as soon as possible.

Beginning July 1^st, the interest rates on outstanding federal student loans are expected to rise above 7 percent – the highest rate in six years – and the rate on outstanding federal parent loans are expected to rise to about 7.8 percent.  All those with must act now to consolidate ALL federal student and parent loans by June 30^th of this year. 

By consolidating loans, students and parents can save on their education debts.  Those who consolidate their student loans before July 1^st may be eligible to obtain a rate as low as 4.75 percent over the life of their loan(s).  The average undergraduate borrower who obtains this lower rate stands to save almost $3,500 over the life of his or her loan.  Parent borrowers can also save by consolidating their loans for a rate as low as 6.1 percent if they act by June 30^th. 

If you have a Direct Loan through the Department of Education you can call 1-800-557-7392 or apply on-line at http://www.loanconsolidation.ed.gov.  If you have a loan through the FFEL program (a bank-based loan) you can contact one of the companies that own or service your student or parent loans(s).  If you have loans with more than one lender you can chose to consolidate through the Department of Education or with any lender that provides federal consolidation loans.

I have proudly cosponsored the Reverse the Raid on Student Aid Act that seeks to cut interest rates for student loans nearly in half but until we can get this bill passed, I implore parents and students with outstanding federal loans to consolidate their loans before rates increase to record highs on July 1^st. 

Pictured above: (center) Congresswoman Capps meets with Central Coast firefighters to discuss emergency preparedness.