« on: March 27, 2008, 09:46:05 AM »
I am not sure of the number for sure, but the rates for the first year were 6.8%, I think. Then they get lower over the next 5 years and bottom out at around 3.5%, then go back up to 6.8 in 2012%.
In terms of consolidation, the rate is generally "fixed" as weighted average of all your loans. However, the incentives offered by the lender differ, sometimes greatly. Some lender offer steeper discounts for things like autopay and making x number of on time payments. Some lenders reserve the right to cancel the incentives at their leisure or sell your loan to a lender who does not habe to honor them. I don't want to sound like an infomercial for graduate leverage, but I looked into various lenders and found the deal that they negotiated to be the best.
On a side note, Congress paid for fixed rates (which at the time were lower than the variable rate) by reducing subsidies paid to lenders who write these loans. A side effect to cutting the subsidies (and the turn in the economy)is that private lendeers who offer stafford and private loans (like access group) are less willing to write nonguaranteed private loans, making it harder for students to qualify for a private loan, if needed. To be a Friedmaniac for a moment, if congress had let the rates remain variable and tied to the fed rate, they may be lower than the fixed rate they are set at now.