July 1 Deadline to Consolidate Loans
But, Abellard will owe much less after she consolidates.
"After the consolidation process, I'll know what I can expect after graduation instead of being thrown into it after I walk across the stage," she explained.
Abellard and other college students can expect to pay about 4.75% in interest if they consolidate loans before July 1. After that, interest on consolidated loans jumps to 6.54%. For recent grads who wait until the end of a six-month grace period, the rate jumps again, from 6.54% to 7.1%.
For a $20,000 loan, a graduate could pay as much as $7,000 more over 20 years.
The only loans students don't have to worry about by July 1 are private loans, which cannot be consolidated with federal loans. If there are only private loans, consolidation may not be the best option.
Students cannot get a fixed interest rate on private loans, and many companies charge fees to consolidate. However, students can consolidate federal loans through the government or a private company. Experts advise making sure it is a federal program and charges no consolidation fee.
"Don't wait until the last minute, do it now," recommended Sharon Abernathy, Columbia College financial aid director. "Pick someone that's going to give you some repayment benefits."
That's what Abellard did. After a visiting MU's Office of Financial Success, she figured out how to start the process.
"I really do feel like there's a weight that's been lifted off my shoulders," she said.