Whether you’ve graduated recently or you’re thinking about going back to school, there are some appealing rate cuts that you could take advantage of. This is potentially a great opportunity to strategically slice your interest rates, with a little homework.

Student Loan Rate Cuts on Those Going Back to School (or Beginning)

Recently, subsidized Stafford loan rates were cut from 6 to 5.6%. And it’s going to get a lot better. Here’s how the rates shake out over the next few years:

• July 1, 2009 – June 30, 2010 = 5.6%
• July 1, 2010 – June 30, 2011 = 4.5%
• July 1, 2011 – June 30, 2012 = 3.4%

Keep in mind that these are the subsidized versions of Stafford loans, meaning that you have proven you need the loan assistance. If unsubsidized, Stafford loans remain steady at 6.8%, which is what the subsidized versions will return to in mid – 2012. To find out if you’re eligible for a Stafford loan, check out the resources at the end of the post. If you’re thinking of going back to school at some point, but not quite sure when, it might be worth taking the upcoming rate cuts into consideration.

Rate Cuts for those who have Already Taken Out Loans

If you had taken out federal loans before July 1, 2006, the repayment interest rate on those loans has recently dropped from 4.21% to 2.48%. If you consolidate, you can lock in a rate of 2.5% for the life of the loan. If you are in your six month post-grad grace period, you can lock in a rate of 2%.

If you have Federal PLUS loans, rate have dropped from 5.01% to 3.38%. PLUS loan borrowers who consolidate can lock in a rate of 3.38%. Whether you’ve taken out federal loans or PLUS, there don’t seem to be many downsides in locking in a low rate now.

Want to Get a Subsidized Stafford Loan?

The first step is to apply on the official U.S. government FAFSA site (Free Application for Federal Student Aid)

You can also find out more about Stafford loans at the:

U.S. Department of Education Stafford loan site

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