(Warwick, R.I.) Congressman Jim Langevin (D-RI) today encouraged students and their parents to consider consolidating their college student loans by July 1.

The interest rates on outstanding federal student loans are expected to rise to just over seven percent on July 1. The rate on outstanding federal parent loans is expected to rise to about 7.8 percent. Student borrowers who consolidate before July 1 may be eligible to lock in a rate as low as 4.75 percent over the life of their loan(s). Locking in this rate could save the typical undergraduate borrower almost $3,500 over the life of his or her loan.

“With interest rates expected to rise to their highest level in six years, it is important that students and their families examine their loan schedules to see if they are eligible for consolidation,” said Langevin. “Students and parents must act quickly to ensure that they can lock in lower rates where possible.”

Other benefits of consolidation may include eliminating the need for dealing with multiple lenders or allowing borrowers to enroll in payment plans based on a percentage of their income. Borrowers who make a set number of on-time repayments or who make payments through automatic banking can obtain additional interest rate reductions.

As students weigh consolidation options, Langevin continues to advocate for legislation that would ease the financial burdens of higher education. He is currently a cosponsor of H.R. 2505, the College Loan Assistance Act, which would allow students that have already locked in at a higher interest rate to take advantage of these low rates and consolidate their debt. In addition, the College Loan Assistance Act would eliminate loan and origination fees charged to student borrowers. Currently, the government charges student borrowers a fee of up to four percent on the loan principal, adding to the burden of a student’s debt.

“While many student borrowers never see these fees, they accrue interest and add to the overall debt they have to repay,” continued Langevin.

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 loan(s). Students who are still in school may also be eligible for consolidation.

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