To the editor:

Student Financial Aid wants to tell students who have borrowed through the Federal Direct Loan Program (both subsidized and unsubsidized) about a unique opportunity to save money in interest costs.

Every July 1, the interest rate on the Federal Direct Loans is adjusted according to the federal T-bill rate. The current interest rate is 6.32 percent. We anticipate this rate will increase on July 1, 2000.

The Federal Direct Consolidation Loan Program allows you to lock in at a fixed interest rate for the life of your student loans. The interest rate will be determined by calculating a weighted average of all your student loans to be consolidated. A graduating student with $17,125 in debt can expect to save over $2,000 if the loan is consolidated now. If you are not yet graduating, you can still expect to save money because you will lock in at a lower rate now. If rates increase on July 1, the interest rate on the consolidation loan can help to bring down the weighted average if you re-consolidate later.

Students who consolidate while still enrolled in school will retain the six month grace period following graduation or dropping to less than half-time status. Students who will graduate or not return to school must consolidate before May 4 to take advantage of this benefit. If the consolidation happens after you are no longer enrolled, the six-month grace period is lost.

To consolidate, go to the Federal government’s Direct Loan web site at http://www.ed.gov/DirectLoans/. If the only student loans you have are Federal Direct Loans, you can also consolidate via a touchtone phone system by calling (888)758-9730. Enjoy the savings!

Roberta Johnson

Assistant director

Student Financial Aid