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Kevin McCormally: I am Kevin McCormally of Kiplinger's and I am here with Jane Clark, Associate Editor of Kiplinger's Personal Finance magazine to talk about Student Loans. Jane, there is a big change coming with the Federal Student Loan Program, July 1st. Can you explain?
Jane Clark: New student loans which are loans of OP applied to next year's budget and beyond will be fixed, not variable, so those rates will be the same for the life of the loan.
Kevin McCormally: Okay, so on the past, it has been a variable rate that adjusted every year, now going forward to be a fixed. Does this mean that parents and students who need money for next year should rush out before that July 1st deadline to try to get one those variable loans?
Jane Clark: They really don't have time to do that, but what they should be considering is consolidating the loans that they already have, to lock in the rate which after July 1, those variable rates will move up about two percentage points.
Kevin McCormally: So if I don't consolidate by the end of June, my interest rate on all my outstanding loans is to go up by 2 %.
Jane Clark: Right, that's correct.
Kevin McCormally: That's good advice, thank you very much.
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