Student Loan interest rates going down?

Yep - my undergrad loans are at 1.75%. Obviously the Dept. of Ed. wised up to this

bherronp and solaris, how did you get rates that low???

Those simply were the actual rates on Stafford loans in July 2004, kryzak.

In addition, Sallie Mae throws a few freebie rate deductions your way if you make a certain number of monthly payments on time. So I went from a rate of 2.7625% at graduation to 1.75% now. I'm obviously in no hurry to pay off my college loans.

WOW... the rates for stafford was *that* low? I guess the fed rates were 1% back then. I was trying to get a refinance for my mortgage around the 04-05 time frame, but couldn't get it below 5%... sigh.

I don't like that 6.8% thing... I'd rather just use my savings in that case...

Mine undergrad loan is locked somewhere around 2% too (never really paid attention since it was so low)...but now I'm going to be borrowing 10x as much...at a much higher percentage rate. SCARY.

If you think 6.8% is bad look at most private loans. If the feds continue to drop rates they might improve but a lot of published ones I have seen have been 8-11% depending on credit scores. Now if you think that is bad think of what some international students will end up getting if they dont have co-signers. Some companies also screw you on fees, I have seen 0-8% for upfront fees. Most private rates are variable too so while they may be low now they could easily end up going back up in a year or two.

Wish I owned a house where I was going to school, a home equity line of credit or equity loan rate are so much more attractive than student loan rates.

yeah, I was tempted to do a Home Equity Loan, but alas, no reason to keep the house if you can't deduct interest/taxes, and if the house isn't really appreciating in value in the near future.

We talked about leasing our house for about 5 minutes...its not worth the hassle of being a landlord. Especially when I am half way across the country. Yes I could hire a management company but I dont think I would trust someone with my house. The wear and tear, and aging of all my renovations will probably negate any value it could regain in the next year or two. It is more important to sell quickly than it is to get every last penny at this point. If I was going ot school in Boston it would probably be different because I could stay at my parents until it sold. No way I can foot a mortgage/taxes/insurance and rent.

With the WSJ prime rate dropping a percent or so in the last month and the potential for another drop in the near future interest rates should go down again if you get a loan tied to prime. That said in 2 years when the feds jack up rates to stem inflation we could end up being screwed if there isnt a way to lock in. I will take a half percent hit if I can lock in so I dont end up like the people who in 2004 got 3 year ARMs on their houses to get 4.5% instead of 4.8% fixed.

at this point I kind of wished I stayed with the 5 or 7 year ARM at 0.5 to 0.75% lower rates. I switched from 7 year ARM to 30 fixed because I thought it would always be good to keep the place, even if I buy a 2nd home or something. But that was way before I even considered going back to school. How things change...