click here for Free Student Loan Consolidation Quote

Congress voted on and passed Feb. 1 the Deficit Reduction Act of 2005 that included massive cuts to federal student loan programs. The $12.7 billion in student loan cuts and changes in laws regarding student loan debt consolidation will negatively impact those students seeking a college education and others seeking to consolidate their higher interest loans. The industry expects a rush of students seeking to consolidate at the current low rates before the imminent July 1 increase.

Students and graduates now are urged to consolidate as current consolidation rates can be as low as 2.75% with benefits applied. Other incentives to consolidate include a longer payment term, one monthly payment and no prepayment penalties.

The passage of the Budget Reconciliation Act of 2005 heralds bad news for college graduates in 2006. The Act ushers in a record increase in student loan interest rates, forcing college students and college graduates to pay thousands of dollars more for student loans at a time when tuition has never been higher. However, recent graduates can consolidate student loans today to insulate themselves from the rate increase.