Department of Education to Disallow In-School Student Loan Consolidations

The Department of Education has announced that, as of midnight, June 30, 2006, students that are enrolled in a college or university will not be allowed to consolidate their student loans. This regulation change means that all students that do not consolidate their Federal Student Loans before July 1st will see their loan interest rates increase from 4.7% to 6.8% while they remain in school.

“Ever since this announcement was made by the Department of Education, we have been working very hard to contact all prospective borrowers to explain the changes to the Student Lending laws,” said Michael Babb, President of Academic Financial Solutions. “This pending legislative change can really put future graduates on shaky financial footing if they don’t exercise their Federal right and consolidate their student loans before the July 1st deadline.”