Consolidate Now to Make the Most of Your Money

Today's college graduates don't just face the onset of student loan payments when they leave school -- they're burdened with record-high credit card debt as well. Whether from financing a new work wardrobe or outfitting their first apartment, today's new graduates can rack up thousands of dollars in credit card debt quickly, debt not easily paid off when student loans also must be paid back.

And with student loan rates set to increase significantly July 1, borrowers face even more difficulties.

"When student loan interest rates go up, borrowers will find they have even less money to spare for regular expenses, let alone paying back credit card debt," explained Mike O'Brien, President and CEO of FinancialAid.com, LLC, a subsidiary of Education Lending Group, Inc. ( NASDAQ = EDLG ) . "If they do not consolidate their student loan debt prior to July 1, money will get tight in a hurry."

Student loan interest rates are reset each July, and reflect long-term interest rates set by the Federal Reserve Board. Because the Federal Reserve Board has increased long-term interest rates six times since mid-2004, expectations are high that a significant jump in student loan interest rates will occur when rates are reset this year. If rates stay at current levels, student loan interest rates could increase 1.5% as of July 1, 2005. However, interest rate watchers predict the Federal Reserve Board could authorize additional increases in 2005, which would potentially increase student loan interest rates as much as 2%.

"Consolidating now, when interest rates are low, will save a borrower with a $30,000 student loan about $4,700 in interest costs over the life of the loan, versus consolidating after July 1," O'Brien said. "That money could be used instead to pay down credit debt. A student with $5,000 in debt, paying just the minimum payments on your typical 21% interest rate credit card will take nearly ten years to pay that debt off -- if they ever do. With even $25 more a month, they can cut that timeframe down by four years." Eligible borrowers who apply for consolidation through FinancialAid.com by June 30 will ensure they receive current interest rates, which went into effect July 1, 2004.

To learn more about loan consolidation and other student finance solutions, borrowers can visit the FinancialAid.com website at http://www.financialaid.com or call toll-free, 888-868-1391.