KENNEDY URGES COLLEGE STUDENTS TO CONSOLIDATE STUDENT LOANS

Washington, D.C. – Today, Senator Edward M. Kennedy urged college students nation-wide to consolidate their student loans before interest rates jump almost 2 percentage points on July 1st. This increase will be one of the largest single-year increases in the 40-year history of the federal student loan programs. Because changes in law that will limit loan consolidation options for student borrowers will also become effective on July 1, Senator Kennedy urges students to consolidate to take advantage of current law and interest rates. “As the costs of college continue to skyrocket, more and more students are graduating deep in debt. Congress must do more to reduce interest rates and expand benefits for students and families in orderto make college more affordable for all Americans. In the meantime, I urge students to lock in today’s lower rates by consolidating their student loans before July 1st.” Currently, over nine million people are borrowing Stafford loans, and 73% of graduates from private 4-year colleges and 62% of graduates from public 4-year colleges have student loan debt. Loan consolidation enables students to pay off their current loans, which may have different and variable rates, with the proceeds of a single, new loan at a fixed interest rate instead of multiple payments. Consolidated loans also allow students to lock in today’s lower interest rates for the duration of the loan.Below is a letter Senator Kennedy released to students nationwide: May 11, 2006