Consolidate Student Loans by July 1

The federal government may raise the interest rate for student loans by as much as 2 percent on July 1, but borrowers may lock in their current rates by consolidating their loans now.

Consolidation can lower monthly payments by as much as 50 percent (for an average savings of about $10,000 in interest) and might improve borrowers' credit scores, says Hoyt Morgan, vice president of marketing at College Loan Corporation, AAFP's student loan partner. AAFP members can use the AAFP Member Loan Consolidation Program (Members Only) to consolidate their loans.

Members who consolidate their loans through the corporation and make their payments on time for 48 consecutive months may receive cash rebates of as much as $4,000, Morgan says. In addition, AAFP members can reduce their interest rates by an added 0.25 percent by making automatic payments from their checking or savings accounts.

"A doctor may have many but not all of his or her educational loans consolidated," says Morgan. "We can assist AAFP members in checking that out."

The Academy launched the Member Loan Consolidation Program last May, and 195 members used it in 2005, says Kelly Wiens, an affinity relations specialist in the AAFP Membership Division. "During the first three months of 2006, we had 255 members apply for the program, and members tell us they're getting great help from the program concerning interest rates, consolidation, and changes in federal laws and regulations."

To see whether your student loans are variable and to obtain assistance in consolidating loans and getting interest rates fixed, call College Loan Corporation at (888) 972-8266 or check the AAFP Web page (Members Only). The corporation's loan consultants can assist you on the phone 24 hours a day. To speak to Wiens at AAFP, call (800) 274-2237, Ext. 6814.