Students at Iowa State may not have control over the rising cost of tuition, but they now have the opportunity to limit the amount they pay after graduation.

“The current interest rate for federal education loans has never been lower,” said Chad Olson, program assistant for Student Financial Aid.

Students can lock in current interest rates by consolidating their federal education loans, he said.

By consolidating, students get the best possible interest rate, reduce the additional amount they will pay in the future and have the convenience of only one payment each month, Olson said.

The fixed interest rate on government loans changes each year in July.

The current rate of 3.46 percent for in-school loans borrowed after 1998 is the lowest in 35 years, he said.

Students don’t have to be graduating to consider loan consolidation. If a student is only a freshman or sophomore, they can still benefit by consolidating their loans, Olson said.

Consolidation would lock federal education loans at 3.46 percent, and any loans they continue to take out would be subject to the annual rate change.

“[The interest rate] will probably not go a whole lot lower, if at all,” Olson said.

As the interest rate increases, a student’s final consolidation rate will be a weighted average for the various rates they have paid.

Olson said there are a few things to be aware of before consolidating.

If a student believes he or she might be eligible for loan repayment after graduation, they should not consolidate because the consolidation makes the repayment options void.

Students who consolidate their loans forfeit the six-month grace period for beginning payments after they graduate, he said.

Olson said students should wait until the fifth month of their grace period to consolidate loans if they are not sure of their post-graduation plans.

He said many lending institutions offer loan consolidation. Some might be more reputable than others, he said.

“The most reputable lending institution is the United States government,” Olson said.

Mark Oleson, financial planning counselor and assistant professor of human development and family studies, said many students are not aware of the options that are available to them.

“[Many students make the mistake of] taking the first deal that comes their way,” he said.

Oleson said there are several options for students, depending upon their background and future plans. Each student’s financial situation is unique and it is important to plan early and look into all of the options, he said.

Oleson said he advises students to look at the Financial Counseling Web site at www.fcs.iastate.edu/financial/ and to use Iowa’s Direct Consolidation Loan as a reference point for other loans.

“There is no reason not to look into some type of consolidation right now, [but] there are a lot of myths about student loans,” he said.